By the mid-1990s Jobs was finding some pleasure in his new

By the mid-1990s Jobs was finding some pleasure in his new family life and

his astonishing triumph in the movie business, but he despaired about the

personal computer industry. “Innovation has virtually ceased,” he told Gary

Wolf of Wired at the end of 1995. “Microsoft dominates with very little

innovation. Apple lost. The desktop market has entered the dark ages.”


NeXT, it has a hard time attracting customers.”

NeXT tried to reposition itself as the leader in a new category, personal workstations,

for people who wanted the power of a workstation and the friendliness of a personal

computer. But those customers were by now buying them from fast-growing Sun


Microsystems. Revenues for NeXT in 1990 were $28 million; Sun made $2.5 billion that year.

IBM abandoned its deal to license the NeXT software, so Jobs was forced to do something

against his nature: Despite his ingrained belief that hardware and software should be

integrally linked, he agreed in January 1992 to license the NeXTSTEP


operating system to run on other computers.

One surprising defender of Jobs was Jean-Louis Gassée, who had bumped elbows with

Jobs when he replaced him at Apple and subsequently been ousted himself. He wrote an


article extolling the creativity of NeXT products. “NeXT might not be Apple,” Gassée argued,

“but Steve is still Steve.” A few days later his wife answered a knock on the door and went

running upstairs to tell him that Jobs was standing there. He thanked Gassée for the article


and invited him to an event where Intel’s Andy Grove would join Jobs in announcing that

NeXTSTEP would be ported to the IBM/Intel platform. “I sat next to Steve’s father, Paul Jobs,

a movingly dignified individual,” Gassée recalled. “He raised a difficult son, but he was

proud and happy to see him onstage with Andy Grove.”


A year later Jobs took the inevitable subsequent step: He gave up making the hardware

altogether. This was a painful decision, just as it had been when he gave up making hardware

at Pixar. He cared about all aspects of his products, but the hardware was a particular passion.


He was energized by great design, obsessed over manufacturing details, and would spend

hours watching his robots make his perfect machines. But now he had to lay off more than

half his workforce, sell his beloved factory to Canon (which auctioned off the fancy furniture),

and satisfy himself with a company


that tried to license an

operating system to

manufacturers of

uninspired machines.


The new team at Disney—Michael Eisner the CEO and Jeffrey

The new team at Disney—Michael Eisner the CEO and Jeffrey Katzenberg in the film

division—began a quest to get Lasseter to come back. They liked Tin Toy, and they

thought that something more could be done with animated stories of toys that come


alive and have human emotions. But Lasseter, grateful for Jobs’s faith in him, felt that

Pixar was the only place where he could create a new world of computer-generated

animation. He told Catmull, “I can go to Disney and be a director, or I can stay here


and make history.” So Disney began talking about making a production deal with Pixar.

“Lasseter’s shorts were really breathtaking both in storytelling and in the use of technology,”

recalled Katzenberg. “I tried so hard to get him to Disney, but he was loyal to Steve and Pixar.


So if you can’t beat them, join them. We decided to look for ways we could join up with

Pixar and have them make a film about toys for us.”


By this point Jobs had poured close to $50 million of his own money into Pixar—more than

half of what he had pocketed when he cashed out of Apple—and he was still losing money

at NeXT. He was hard-nosed about it; he forced all Pixar employees to give up their options


as part of his agreement to add another round of personal funding in 1991. But he was also

a romantic in his love for what artistry and technology could do together. His belief that

ordinary consumers would love to do 3-D modeling on Pixar software turned out to be


wrong, but that was soon replaced by an instinct that turned out to be right: that

combining great art and digital technology would transform animated films more than

anything had since 1937, when Walt Disney had given life to Snow White.


Looking back, Jobs said that, had he known more, he would have focused on animation

sooner and not worried about pushing the company’s hardware or software applications.

On the other hand, had he known the hardware and software would never be profitable,

he would not have taken over Pixar. “Life

kind of snookered

me into doing

that, and perhaps it

was for the better.”


Even as Pixar’s hardware and software product lines foundered,

Even as Pixar’s hardware and software product lines foundered, Jobs kept protecting

the animation group. It had become for him a little island of magical artistry that

gave him deep emotional pleasure, and he was willing to nurture it and bet on it.



decree deep spending cuts across the board. When it was over, Lasseter and his

animation group were almost too afraid to ask Jobs about authorizing some extra


money for another short. Finally, they broached the topic and Jobs sat silent, looking

skeptical. It would require close to $300,000 more out of his pocket. After a few

minutes, he asked if there were any storyboards. Catmull took him down to the

animation offices, and once Lasseter started his show—displaying his boards, doing


the voices, showing his passion for his product—Jobs started to warm up.

The story was about Lasseter’s love, classic toys. It was told from the perspective

of a toy one-man band named Tinny, who meets a baby that charms and terrorizes


him. Escaping under the couch, Tinny finds other frightened toys, but when the

baby hits his head and cries, Tinny goes back out to cheer him up.

Jobs said he would provide the money. “I believed in what John was doing,” he later


said. “It was art. He cared, and I cared. I always said yes.” His only comment at the

end of Lasseter’s presentation was, “All I ask of you, John, is to make it great.”


Tin Toy went on to win the 1988 Academy Award for animated short films, the first

computer-generated film to do so. To celebrate, Jobs took Lasseter and his team to

Greens, a vegetarian restaurant in San Francisco. Lasseter grabbed the

Oscar, which was in the center of the table,


held it aloft, and

toasted Jobs by saying, “All

you asked is that we

make a great movie.”


At one point the members of the Pixar animation team were trying

At one point the members of the Pixar animation team were trying to convince Intel

to let them make some of its commercials, and Jobs became impatient. During a

meeting, in the midst of berating an Intel marketing director, he picked up the phone


and called CEO Andy Grove directly. Grove, still playing mentor, tried to teach Jobs

a lesson: He supported his Intel manager. “I stuck by my employee,” he recalled.

“Steve doesn’t like to be treated like a supplier.”

Grove also played mentor when Jobs proposed that Pixar give Intel suggestions on

how to improve the capacity of its processors to render 3-D graphics. When the

engineers at Intel accepted the offer, Jobs sent an email back saying Pixar would

need to be paid for its advice. Intel’s chief engineer replied, “We have not entered

into any financial arrangement in exchange for good ideas for our microprocessors

in the past and have no intention for the future.” Jobs forwarded the answer to

Grove, saying that he found the engineer’s response to be “extremely arrogant,

given Intel’s dismal showing in understanding computer graphics.” Grove sent Jobs

a blistering reply, saying that sharing ideas is “what friendly companies and friends

do for each other.” Grove added that he had often freely shared ideas with Jobs in

the past and that Jobs should not be so mercenary. Jobs relented. “I have many

faults, but one of them is not ingratitude,” he responded. “Therefore, I have changed

my position 180 degrees—we will freely help. Thanks for the clearer perspective.”

Pixar was able to create some powerful software products aimed at average consumers,

or at least those average consumers who shared Jobs’s passion for designing things.

Jobs still hoped that the ability to make super-realistic 3-D images at home would become

part of the desktop publishing craze. Pixar’s Showplace, for example, allowed users to

change the shadings on the 3-D objects they created so that they could display them

from various angles with appropriate shadows. Jobs thought it was incredibly compelling,

but most consumers were content to live without it. It was a case where his passions misled

him: The software had so many amazing features that it lacked the simplicity Jobs usually

demanded. Pixar couldn’t compete with Adobe, which was making


software that was less

sophisticated but

far less complicated

and expensive.


Jobs was very possessive about control of the whiteboard during

Jobs was very possessive about control of the whiteboard during a meeting,

so the burly Smith pushed past him and started writing on it. “You can’t do that!” Jobs shouted.

“What?” responded Smith, “I can’t write on your whiteboard? Bullshit.” At that point Jobs stormed out.


Smith eventually resigned to form a new company to make software for digital drawing

and image editing. Jobs refused him permission to use some code he had created while

at Pixar, which further inflamed their enmity. “Alvy eventually got what he needed,” said

Catmull, “but he was very stressed for a year and developed a lung infection.” In the end

it worked out well enough; Microsoft eventually bought Smith’s company, giving him the

distinction of being a founder of one company that was sold to Jobs and another that was sold to Gates.

Ornery in the best of times, Jobs became particularly so when it became clear that all three

Pixar endeavors—hardware, software, and animated content—were losing money. “I’d get

these plans, and in the end I kept having to put in more money,” he recalled. He would rail,

but then write the check. Having been ousted at Apple and flailing at NeXT, he couldn’t afford a third strike.

To stem the losses, he ordered a round of deep layoffs, which he executed with his typical empathy

deficiency. As Pam Kerwin put it, he had “neither the emotional nor financial runway to be decent

to people he was letting go.” Jobs insisted that the firings be done immediately, with no severance

pay. Kerwin took Jobs on a walk around the parking lot and begged that the employees be given

at least two weeks notice. “Okay,” he shot back, “but the notice is retroactive from two weeks ago.”

Catmull was in Moscow, and Kerwin put in frantic calls to him. When he returned, he was


able to institute a

meager severance

plan and calm things

down just a bit.


Luxo Jr. was nominated for an Academy Award, and Jobs flew

Luxo Jr. was nominated for an Academy Award, and Jobs flew down to Los

Angeles to be there for the ceremony. It didn’t win, but Jobs became committed

to making new animated shorts each year, even though there was not much


of a business rationale for doing so. As times got tough at Pixar, he would sit through

brutal budget-cutting meetings showing no mercy. Then Lasseter would ask

that the money they had just saved be used for his next film, and Jobs would agree.

Tin Toy


Not all of Jobs’s relationships at Pixar were as good. His worst clash came with Catmull’s

cofounder, Alvy Ray Smith. From a Baptist background in rural north Texas, Smith became

a free-spirited hippie computer imaging engineer with a big build, big laugh, and big


personality—and occasionally an ego to match. “Alvy just glows, with a high color, friendly

laugh, and a whole bunch of groupies at conferences,” said Pam Kerwin. “A personality like

Alvy’s was likely to ruffle Steve. They are both visionaries and high energy and high ego.

Alvy is not as willing to make peace and overlook things as Ed was.”shlf419


Smith saw Jobs as someone whose charisma and ego led him to abuse power. “He was like

a televangelist,” Smith said. “He wanted to control people, but I would not be a slave to him,

which is why we clashed. Ed was much more able to go with the flow.” Jobs would sometimes

assert his dominance at a meeting by saying something outrageous or untrue. Smith took


great joy in calling him on it, and he would do so with a large laugh and a smirk.

This did not endear him to Jobs.shlf419

One day at a board meeting, Jobs started berating Smith and other top Pixar executives for

the delay in getting the circuit boards completed for the new version of the Pixar Image

Computer. At the time, NeXT was also very late in completing its own computer boards,


and Smith pointed that out: “Hey, you’re even later with your NeXT boards, so quit jumping

on us.” Jobs went ballistic, or in Smith’s phrase, “totally nonlinear.” When Smith was feeling

attacked or confrontational, he tended to lapse into his southwestern accent. Jobs started

parodying it in his sarcastic style. “It was a bully tactic, and I exploded with

everything I had,” Smith recalled. “Before I knew it, we were shlf419


in each other’s faces—

about three inches


at each other.”


Jobs and Catmull decided that, in order to show off their hardware

Jobs and Catmull decided that, in order to show off their hardware and software,

Lasseter should produce another short animated film in 1986 for SIGGRAPH, the

annual computer graphics conference. At the time, Lasseter was using the Luxo


lamp on his desk as a model for graphic rendering, and he decided to turn Luxo

into a lifelike character. A friend’s young child inspired him to add Luxo Jr., and he

showed a few test frames to another animator, who urged him to make sure he


told a story. Lasseter said he was making only a short, but the animator reminded

him that a story can be told even in a few seconds. Lasseter took the lesson to

heart. Luxo Jr. ended up being just over two minutes; it told the tale of a parent

lamp and a child lamp pushing a ball back and forth until


the ball bursts, to the child’s dismay.

Jobs was so excited that he took time off from the pressures at NeXT to fly down

with Lasseter to SIGGRAPH, which was being held in Dallas that August. “It was so

hot and muggy that when we’d walk outside the air hit us like a tennis racket,”


Lasseter recalled. There were ten thousand people at the trade show, and Jobs loved it.

Artistic creativity energized him, especially when it was connected to technology.

There was a long line to get into the auditorium where the films were being screened, so


Jobs, not one to wait his turn, fast-talked their way in first. Luxo Jr. got a prolonged standing

ovation and was named the best film. “Oh, wow!” Jobs exclaimed at the end. “I really get this,

I get what it’s all about.” As he later explained, “Our film was the only one that had art to it, not just


good technology. Pixar

was about making that

combination, just as the

Macintosh had been.”


AnimationThe digital animation business at Pixar—the group that

AnimationThe digital animation business at Pixar—the group that made

little animated films—was originally just a sideline, its main purpose being to

show off the hardware and software of the company. It was run by John


Lasseter, a man whose childlike face and demeanor masked an artistic

perfectionism that rivaled that of Jobs. Born in Hollywood, Lasseter grew up

loving Saturday morning cartoon shows. In ninth grade, he wrote a report


on the history of Disney Studios, and he decided then how he wished to spend his life.

When he graduated from high school, Lasseter enrolled in the animation program

at the California Institute of the Arts, founded by Walt Disney. In his summers and

spare time, he researched the Disney archives and worked as a guide on the Jungle


Cruise ride at Disneyland. The latter experience taught him the value of timing and

pacing in telling a story, an important but difficult concept to master when creating,

frame by frame, animated footage. He won the Student Academy Award for the short

he made in his junior year, Lady and the Lamp, which showed his debt to Disney films


and foreshadowed his signature talent for infusing inanimate objects such as lamps

with human personalities. After graduation he took the job for which he was

destined: as an animator at Disney Studios.


Except it didn’t work out. “Some of us younger guys wanted to bring Star Wars–level

quality to the art of animation, but we were held in check,” Lasseter recalled. “I got

disillusioned, then I got caught in a feud between two bosses, and the head animation


guy fired me.” So in 1984 Ed Catmull and Alvy Ray Smith were able to recruit him to

work where Star Wars–level quality was being defined, Lucasfilm. It was not certain that

George Lucas, already worried about the cost of his computer division, would really


approve of hiring a full-time animator, so Lasseter was given the title “interface designer.”

After Jobs came onto the scene, he and Lasseter began to share their passion for graphic

design. “I was the only guy at Pixar who was an artist, so I bonded with Steve over his design

sense,” Lasseter said. He was a gregarious, playful, and huggable man who wore flowery


Hawaiian shirts, kept his office cluttered with vintage toys, and loved cheeseburgers. Jobs

was a prickly, whip-thin vegetarian who favored austere and uncluttered surroundings.

But they were actually well-suited for each other. Lasseter was an artist, so Jobs treated

him deferentially, and Lasseter viewed Jobs, correctly, as a patron who could appreciate artistry


and knew how it

could be interwoven

with technology

and commerce.


The chief financial officer at Lucasfilm found Jobs arrogant

The chief financial officer at Lucasfilm found Jobs arrogant and prickly, so when it

came time to hold a meeting of all the players, he told Catmull, “We have to establish

the right pecking order.” The plan was to gather everyone in a room with Jobs, and

then the CFO would come in a few minutes late to establish that he was the person

running the meeting. “But a funny thing happened,” Catmull recalled. “Steve started

the meeting on time without the CFO, and by the time the CFO walked in

Steve was already in control of the meeting.”

Jobs met only once with George Lucas, who warned him that the people in the division

cared more about making animated movies than they did about making computers.

“You know, these guys are hell-bent on animation,” Lucas told him. Lucas later recalled,

“I did warn him that was basically Ed and John’s agenda. I think in his heart he bought

the company because that was his agenda too.”

The final agreement was reached in January 1986. It provided that, for his $10 million

investment, Jobs would own 70% of the company, with the rest of the stock distributed

to Ed Catmull, Alvy Ray Smith, and the thirty-eight other founding employees, down to

the receptionist. The division’s most important piece of hardware was called the Pixar

Image Computer, and from it the new company took its name.

For a while Jobs let Catmull and Smith run Pixar without much interference. Every month

or so they would gather for a board meeting, usually at NeXT headquarters, where Jobs

would focus on the finances and strategy. Nevertheless, by dint of his personality and

controlling instincts, Jobs was soon playing a stronger role. He spewed out a stream of

ideas—some reasonable, others wacky—about what Pixar’s hardware and software could

become. And on his occasional visits to the Pixar offices, he was an inspiring presence.

“I grew up a Southern Baptist, and we had revival meetings with mesmerizing but corrupt

preachers,” recounted Alvy Ray Smith. “Steve’s got it: the power of the tongue and the

web of words that catches people up. We were aware of this when we had board meetings,

so we developed signals—nose scratching or ear tugs—for when someone


had been caught up in

Steve’s distortion field

and he needed to be

tugged back to reality.”


On the software side, Pixar had a rendering program, known as

On the software side, Pixar had a rendering program, known as Reyes

(Renders everything you ever saw), for making 3-D graphics and images.

After Jobs became chairman, the company created a new language and


interface, named RenderMan, that it hoped would become a standard

for 3-D graphics rendering, just as Adobe’s PostScript was for laser printing.

As he had with the hardware, Jobs decided that they should try to find a

mass market, rather than just a specialized one, for the software they made.


He was never content to aim only at the corporate or high-end specialized

markets. “He would have these great visions of how RenderMan could be

for everyman,” recalled Pam Kerwin, Pixar’s marketing director. “He kept


coming up with ideas about how ordinary people would use it to make amazing

3-D graphics and photorealistic images.” The Pixar team would try to dissuade

him by saying that RenderMan was not as easy to use as, say, Excel or Adobe


Illustrator. Then Jobs would go to a whiteboard and show them how to make

it simpler and more user-friendly. “We would be nodding our heads and getting

excited and say, ‘Yes, yes, this will be great!’” Kerwin recalled. “And then he would


leave and we would consider it for a moment and then say, ‘What the heck was

he thinking!’ He was so weirdly charismatic that you almost had to get deprogrammed

after you talked to him.” As it turned out, average consumers were not craving


expensive software that would let them render realistic images. RenderMan didn’t take off.

There was, however, one company that was eager to automate the rendering

of animators’ drawings into color images for film. When Roy Disney led a board


revolution at the company that his uncle Walt had founded, the new CEO, Michael

Eisner, asked what role he wanted. Disney said that he would like to revive the

company’s venerable but fading animation department. One of his first initiatives


was to look at ways to computerize the process, and Pixar won the contract. It

created a package of customized hardware and software known as CAPS, Computer

Animation Production System. It was first used in 1988 for the final scene of The Little

Mermaid, in which King Triton waves good-bye to Ariel. Disney bought


dozens of Pixar Image

Computers as CAPS became

an integral part

of its production.