To Pixar and Beyond

It is perhaps easy to look at Pixar’s film accomplishments and imagine that they emerged in a blaze of creative glory, that Pixar was created as a storytelling, artistic utopia. This wasn’t my experience of it. The making of Pixar was more akin to the high-pressure grinding of tectonic plates pushing up new mountains. One of those plates carried the intense pressures of innovation: the drive for artistic and creative excellence in storytelling and the invention of a new medium, computer animation, through which to express it. The other of those plates carried the real-world pressures of survival: raising money, selling movie tickets, increasing the pace of production.

This book was written by the CFO, and boy do I wish more CFO’s wrote books. It’s astonishing to see just how bad Pixar’s finances were, and how many times they almost died.

If I learned anything at Pixar, it is that story comes first. Pixar’s creative leader, John Lasseter, used to say, “Great graphics will keep us entertained for a couple of minutes; it is story that holds us in our seats.”

It’s the equivalent of product quality comes first.

Pixar was in a one-story, ordinary office building with no remarkable features. Its lobby was equally unremarkable, small, poorly lit, with a display case against one wall that showcased some of Pixar’s awards. It could not have been more of a contrast from the contemporary, sleek offices where Steve worked at NeXT. As I entered the main door, I thought to myself, “This is it? This is Pixar?”

Maybe I’ve read too much Walton and Bezos, but I think this is a great sign.

“How does Pixar fund its business now?” I asked. Ed explained how it was very much just month to month. Disney paid for film production costs while sales of RenderMan software and animated commercials brought in some revenues. That wasn’t enough to cover Pixar’s expenses, though. “How do you cover the shortfall?” I asked. “Steve,” Ed explained. “Every month we go to Steve and tell him the amount of the shortfall, and he writes us a check.” That caught me by surprise. I understood that Steve was funding Pixar, but I hadn’t expected it to be in the form of a personal check each month.

Insane how close to ruin they were.

“The effort that our people have put into this company is beyond extraordinary. It’s not been easy. Not easy at all. People have hung in there year after year, doing work that amazes me every single day, sacrificing for this company, and not asking much for doing it.” John had become really passionate about what he was telling me. “These are brilliant, creative, dedicated people, from the top to the bottom of Pixar,” he continued. “I want to see them gain the recognition and reward that they deserve. It has always been a struggle. But I want Pixar to succeed for them, for all of us.” By this point, John’s voice was all but quivering with emotion. It was as if he were the flag bearer for a deep injustice that needed to be corrected.

Sacrificing for your teammates is always the best motivator.

“Steve doesn’t get Pixar,” Pam went on. “We’re artsy and creative. We’re like a family. We hug. And we’re not a top-down organization; everyone here has a voice.” I liked hearing about Pixar’s culture, but it was the strength of Pam’s emotions about Steve that caught my attention. “Steve is the guy who owns us—but he’s never been one of us,” Pam explained. “We’ve long felt unvalued, unappreciated. People worry that if he gets too close, he’ll ruin Pixar and destroy our culture. And now, you’re the guy he has sent to whip us into shape.” That much was true. My mission was to transform Pixar into a thriving enterprise. I was supposed to be an agent of change. “Plus,” Pam added, “he’s broken promises. And people are angry about that.” “What promises?” I asked. “Stock options. He promised them to us, and they’ve never materialized. Perhaps part of your job is to fix that, but every day that passes without a solution, people grow more cynical. Many here have been waiting for years to own a little piece of Pixar. All their friends at other companies have been rewarded, and now they’re frustrated. They feel used. It’s not going to be easy for you to win their trust.”

The broken promises were very real. To this day I still don’t understand Jobs’ hesitation in giving the stock options. The CFO had to fight tooth and nail to get this approved even during IPO!

“About how many customers are there?” I asked. “I’d say there are maybe fifty or so significant studios doing regular work at that level,” she said. Fifty! I was shocked by her answer. Just fifty significant customers—that made it a very small market.

Yeah, Pixar was 100% doomed.

RenderMan might be an Academy Award–winning industry leader, but from a strategic point of view, it wasn’t a business; it was a sideshow. This, of course, was not the conclusion I was looking for. I had been hired to stem the tide of red ink, and the first thing I’m thinking is maybe we should abandon the one product that was making any money. I wasn’t in a rush to tell Steve the news.

Figuring out that the only current source of revenue was a dead end? Yeah I wouldn’t rush to tell him that either.

Steve could easily have told me to ask Microsoft and Silicon Graphics for $25 million each, the amount he wanted. He didn’t. He wanted us to keep talking until we agreed.

Steve was looking for validation to not sell Pixar.

He would debate with intensity over any issue we were discussing, big or small. Sometimes we agreed; sometimes we didn’t. When we didn’t, I would find myself having to stand resilient, steadily holding to my position, yielding not to his intensity but to the merits of the matter. Time and again, I saw how Steve preferred that we come to a mutual resolution, marching forward together, rather than acting on an outcome that he imposed. Years later Steve told me he felt the business and strategic choices we made at Pixar were neither his nor mine but the product of just this process.

As Bezos says, the process is messy. It’s meant to be. Lean into the mess.

“Everyone I know in this business struggles to make ends meet,” Darla explained. “And many don’t make it. Clients trust Pixar because we have a great reputation and they love our work, but we’re also expensive. They like that we have the highest-quality animation, but our prices are often too high to win jobs.” So higher prices were not in the offing, nor was a higher volume of work. It was a shame, Darla lamented. “We do excellent work,” she said. “Everyone on the team puts their heart and soul in whatever we do. But the clients don’t always care about our quality.” Pixar’s revenues from animated commercials were small, and profits almost nonexistent. The division would have to scale by a huge factor, and become much more profitable, to make a meaningful contribution to the company’s bottom line. Based on what I’d learned, this was all but impossible. Once again, Pixar was committing its talent to an endeavor that would never go anywhere.

And thus the second revenue stream was also a dead end.

…animated short films had no commercial value. They were either done purely as a labor of love, or in Pixar’s case as a way to test and develop its technologies and story development process. They were shown at trade shows, film festivals, and sometimes at the beginning of feature films in movie theaters, but they didn’t make a dime. And in fact, they were very expensive to make. I didn’t even need to analyze the economics of the animated short film market. There was no market.

And there goes the third.

“Pixar’s an enigma,” I shared with Hillary one night after dinner. “I don’t think I’ve ever seen so much talent under one roof. Their efforts have been nothing short of heroic, but every business it has tried has either failed or has such limited potential it’s hardly worth the effort. It’s just running in place.” “If nothing’s worked, how did it survive this long?” Hillary wondered. “I suppose it comes down to Steve’s stubbornness,” I replied. “I don’t know any other investor who’d have stuck it out this long. But I know even he’s had his doubts. He’s got nearly fifty million in Pixar and very little to show for it.”

Stubbornness, persistence, determination. Whatever you call it, that’s the most important trait.

Under Pixar’s agreement with Disney, I estimated that if we had made Beauty and the Beast for Disney, our share of the profits would have been around $17 million. Because it takes four years to make a film, this would amount to a little over $4 million of profits per year. I also guessed Disney would likely have made ten times that much.

This reminds me of Ray Kroc’s saying - it was a satanic agreement.

The impact of all these contractual provisions was crushing: until Pixar could release a film outside of the Disney contract, the most we could expect to earn from our first three films would be a few million dollars a year—and even then, only if those films ranked with Disney’s most profitable films ever. No one would invest in a company that had to perform at those levels in order to eke out a small profit.

They really needed to get out of the contract, or they really needed to knock it out of the park.

“If I had known what I know now,” I said, “I can’t imagine I would have taken this job. Taking this company public seems like a crazy notion. No investor I know would come near this. Fifty million in losses, no profits, no growth, Disney holding all the cards. I’m not sure Pixar even needs a CFO.”

It needs a miracle worker.

“Well”—Steve shrugged—“if Toy Story and the other two films are hits, we’ll make some money. Then we’ll be free to do whatever we want.”

Peak wishful thinking. The crazy part is that it works.

As we sat there talking, I realized Steve had no interest in looking back. He didn’t defend the contract. He didn’t justify it. He listened carefully to everything I had to say about it, taking it all in. That was pretty much it.

I’m surprised Steve didn’t explode.

“You know,” I said, “in all my conversations with Steve these past two months, I’ve never found him defensive. I’ve critiqued and dismantled every aspect of Pixar’s business and he had every reason to justify and defend it. But he didn’t. Not once. It’s as if he’s taking this journey with me, learning it at the same time I am.”

Pretty amazing.

I learned that there was a reason the film was specifically about toys, and not about animals or people. Toys are made of plastic. They have uniform surfaces. No variation. No skin. No clothing that needs to wrinkle with every movement. Toys have geometries that are much easier to create with computers.

Technical constraints driving product decisions is nothing new. We make the best we can.

It turned out that part of the genius of Toy Story was not just the brilliance of the story and characters; it was crafting them amid almost impossible constraints.

And sometimes, those constraints are the things that drive innovation.

“So,” I asked, like the slowest student in class who was finally beginning to catch on, “this one machine has to record over a hundred thousand frames of Toy Story onto film?” “Exactly,” David replied. “And it all has to happen in the right sequence, and with the right color and tone so it looks consistent?” “Right again.” “And this is the only one?” I asked. “If this breaks down or a part fails, there’s no backup?” “Yes, that’s right. This is the only one in the world. We have almost enough spare parts to make a backup, but we haven’t really focused on that. It would take a while to assemble.” “What happens if this one breaks during production?” “It can’t,” David blurted, then paused to correct himself. “Obviously, it could. But that would be a disaster. There would be no film that would be delivered and shown in the theaters. It’s not an option.”

That would never happen… right?

Steve had spent almost no time at Pixar during the nine years he had owned it. He didn’t even have an office there. He had founded NeXT in 1985, right after leaving Apple, and although he took over Pixar in 1986, he had worked full time at NeXT all those years.

I totally forgot about NeXT!

Only for the first time, something in my attitude had changed. For almost three months I had wandered around Pixar, feeling increasingly dejected about its prospects, questioning if I should even be there. Now I’d been away for ten days and I missed it. Nothing had happened to change any of my conclusions. I still didn’t have the toehold I needed. But I was feeling something else. Maybe it was the shock of the injury. Maybe it was the care and concern I had experienced from Steve and others at Pixar. Maybe it was my growing appreciation for the magnitude of what Pixar was attempting to do. But there was no question I was experiencing the first glimmer of pride about being on this ship. Pixar was becoming more than a job. What its people had been through, and what they were attempting to do now, was over-the-top extraordinary. It was crazy. I was itching to get back.

He goes through a terrible skiing accident and is forced to spend some time away. Funny how your perspective can change with some light time off.

Hillary went into labor and we had our third child. I spent the event standing on one leg in the labor and delivery room. When we left the hospital, we were both pushed out in wheelchairs, Hillary holding our new baby, me holding my crutches.

An incredible scene.

At the end of the closing credits on Toy Story is a heading called “Production Babies,” below which is a list of all the babies born to Pixar employees during the production of the film. I could not possibly have been prouder to say that my new daughter, Jenna, was among them.

:)

“I talked to Sam. Believe it or not, they have a film model. Only they don’t give it out. They use it only internally, to advise their clients. He said they’d be happy to run the numbers for us but can’t give us the model itself.” “Wow!” I thought to myself. “These financial models must be etched in gold plate. Why are they so secret?”

With one hit movie, they’re starting to unravel the mysteries of Hollywood. Turns out, it’s not that mysterious. They kind of just make it up and guess which movies will be hits.

I began to see why Hal Vogel had characterized raising capital through the stock markets as a torturous obstacle course for a film company. It was virtually impossible to make the numbers work in a way that generated the kind of smooth, even profit growth that investors liked.

It’s the VC model - a few movies generate the vast amount of revenue.

But I had examined this from every angle I could imagine. Fully committing Pixar to becoming an entertainment company focused on animated feature films was our only shot. Steve, Ed, and I were all on board with it. This was our mountain to climb, no matter how steep or far away the summit. With much weighing on my mind, it was time to begin the ascent.

It can be amazingly clarifying once you are unified in which mountain you want to climb. It’s the choosing of it that’s so draining. Once you’re at base camp, there’s only one way to go. No more room for complaints.

Why hadn’t IBM, which led the computing world for decades, or Xerox, which invented the graphical user interface, not themselves become Microsoft and Apple? Years earlier, why hadn’t the railroads become airlines? More important to my present task, today, why wouldn’t Disney become Pixar? If Pixar succeeded at all, wouldn’t Disney, the king of the animation hill for more than two generations, want to claim computer animation for itself? The answer was that it definitely would. What would stop it? The answer, I believed, had to do with one thing: culture. Culture is the invisible force on which innovation depends. We like to pin the mantle of invention on individuals, not circumstances. We anoint heroes and tell their stories. Yet innovation is a collective undertaking. It is as much the product of circumstance as of genius. There is a spirit to it. Preserving that culture and spirit at Pixar was very, very important.

I could not agree more. I speak about this a lot here.

Corporations are a lot like living creatures. They have personalities, emotions, and habits. The person at the top might seem to be calling all the shots but is often imprisoned in a culture he or she can do little to change. As corporations succeed, they generally become more conservative. The flames of creativity on which a company is built can easily cool as pressures to perform mount. Success brings something to defend, something to lose. Fear can easily trump courage.

As Bezos says, fight the institutional no.

…the hotbed of creativity that was the supposed hallmark of Hollywood was not all it was cracked up to be. It was much harder than I thought for the studios to take big risks and to innovate. They seemed to trade more on certainty and copycatting than risk. This meant that if Pixar were to raise its flag as an entertainment company, it would have to avoid the Hollywood habits that stifled innovation.

Surprise surprise, the incumbents sucked.

If Pixar had failed in any one area, it was that its employees did not have stock options. Steve had long promised that he would fix this, but it had not happened. This shortcoming was the single biggest source of resentment and bitterness with employees at Pixar.

This keeps coming up. Steve, just make it right man, come on!

He just didn’t want to give up his own shares. When it came down to his own pocket or the pockets of Pixar’s employees, Steve wanted the stock in his pocket. On the one side, I couldn’t blame him. He was the owner of the company. He had taken all the financial risk. But on the other side, I grew frustrated with Steve over this. I felt we had a chance to fix an injustice in a way that would allow everyone to win. Giving up a little more stock would make little difference in the wealth Steve would enjoy if Pixar succeeded. In any other start-up, Pixar’s key employees would have had stock options years earlier, at very low exercise prices. It was virtually unheard of to put in place a stock option plan so close to a potential public offering. This did not have to be such a battle.

This feels incredibly short sighted.

Many of Pixar’s employees had staked their entire careers on Pixar, had given it the best years of their professional lives. What kept them there? What kept them from jumping ship for more lucrative opportunities? I reasoned that it could only be because they were passionate about Pixar. Despite all the years of commercial failure, they believed in the potential of their own work, and they wanted to see it through. We could not rely on that for much longer, though. They now needed to be rewarded for it.

Yup.

I realized that no amount of deliberation was going to resolve my worries. Sometimes there comes a point when you jump not because you feel ready or are sure that you’ll make it across the chasm, but because the conditions are forcing you off the edge. That’s when you find out if you can fly. I felt this was the time to jump. We had to start moving, and resolving the options problem was the place to begin.

Have to resolve the original sin. There is way too much unrewarded talent here, and you have to make it right.

“I said I didn’t want to revisit this,” Steve griped. He was on the verge of dismissing it. I suggested a number. It was as far as I thought he might go. “Will this be it?” Steve asked, totally exasperated. “Will this be enough options to last for a long while?” I didn’t think it would be. It would barely get us by now. “Yes,” I declared with unfounded confidence. “We’ll make it work.” “Then I don’t want to hear about it again.” And with that, Steve ended the conversation. I breathed a deep sigh of relief. It could have gone much worse.

Lawrence really came through. Nicely done.

At $150 million in domestic box office revenues, the business began to work. But it didn’t really take off until box office revenues exceeded $180 million per film. But here was the reality: releasing films that consistently performed at the level of $150 million or more had never been done, by anyone.

Spoiler alert - they would become the first studio, ever, to do this.

If you excluded The Lion King and Aladdin, the average domestic box office for Disney animated feature films was far less than $100 million. And that was Disney films, a brand trusted in every corner of the globe. If you included the animation efforts of other studios, the average was drastically lower. In fact, no studio besides Disney had ever released an animated film that had a domestic box office much above $50 million in its initial release. How was Pixar, in the new and untested medium of computer animation, possibly going to perform at the levels it needed to succeed?

By having the highest talent density any company had ever scene up until that point.

“We have to change how the world perceives Pixar,” Steve said one evening when we were discussing Pixar’s brand. “Even if Disney gets the billing, people need to know that we made these films. We can’t build a company without a brand.” That was the fourth pillar of our plan: turn Pixar into a brand.

People have to be coming into the theater to see a movie simply because Pixar made it. Without that, it will never be a sustainable model.

…we simply had to QUADRUPLE OUR SHARE OF THE PROFITS RAISE AT LEAST $75 MILLION TO PAY FOR OUR PRODUCTION COSTS MAKE FILMS FAR MORE OFTEN THAN WE KNEW HOW BUILD PIXAR INTO A WORLDWIDE BRAND Piece of cake.

Imagine you’re an investor and that’s the business strategy you see - in all caps. Love it.

Adding even more pressure was how much Pixar’s IPO meant for Steve. It carried with it the full weight of his return from the wilderness into which Apple had banished him ten years earlier. If there was one event that would unquestionably signify Steve’s redemption, it would be Pixar’s IPO.

Again, this was right after the NeXT debacle.

We never openly talked about it, but the way Steve had insisted on control of Pixar when it came time to issuing stock options made me think he hadn’t entirely recovered from the Apple debacle even now.

It’s clear that’s why.

“What opening weekend box office would make you feel really good?” Steve asked me as we were taking a walk in Palo Alto one Saturday afternoon. “Anything above ten million,” I said. “Even if we hit eight million we’re on the board.” “My number’s fifteen,” Steve said. “If we hit fifteen to twenty, they’ll project a total domestic box office of over a hundred million. Then no one will question Pixar’s arrival.”

[sic]

…of the seventeen other animated feature films released by major studios or well-known independents, the average domestic box office was a little under $14 million. That’s total domestic box office, not the opening weekend. In animation, for all practical purposes, Disney had been the only game in town for over fifty years.

[sic]

I’d take $10 million, I reminded myself, but something north of $15 million would be very sweet indeed. “I’m nervous,” Hillary said. Twenty minutes later, the phone rang. I rushed to answer it. “Yes, yes. I see. I get it. Thank you. Yes, I’d love the details. You have my fax number. Thank you.” I hung up the phone, trying to absorb what I had just been told. “So?” Hillary couldn’t wait. “It’s massive,” I said. “Massive. They didn’t believe it was possible. Disney predicts a weekend box office close to thirty million! Friday night’s box office alone was close to eleven and a half million.”

They knock it out of the park!

We could see our symbol PIXR for the first time. We were live. Pixar was a public company. But the trading did not begin at $22. That was the price the first investors paid to Pixar to acquire the stock. It immediately jumped up into the high thirties. Demand was off the charts. We all stared at it, partly beaming, partly in disbelief. Todd Carter broke the silence. He turned to Steve. “Congratulations, Steve,” he said. “You’re a billionaire.” At the end of the first day’s trading, Pixar’s stock was at $39. That gave Pixar a market value of close to $1.5 billion and did indeed make Steve a billionaire.

Steve became a billionaire with Pixar before Apple! Just like Elon became a billionaire with Tesla before Space X.

The problem with success, even a little success, is that it changes you. You are no longer walking along the same precipice that drove you to do great work in the first place. Now you have something to defend: a reputation, money in the bank, a brand, real customer expectations. Success can take the edge away.

This is the main risk with becoming an incumbent.

It was easy to see why Disney worked this way. Creative mistakes can be very expensive to fix. If there is a significant change to the story or to one of the main characters deep into the production process, the change ripples through every aspect of the film. It doesn’t take much to rack up millions or even tens of millions of dollars in unplanned costs. Most executives are not built to take this kind of risk, so they like to keep a close watch on the creative process.

[sic]

As the stakes grew for Pixar, we felt even more pressure to have some sort of executive oversight to make sure Pixar’s creative processes did not go astray.

Fight the urge to become safe and just seek incrementalism.

“I understand the concern here. I really do,” John said. “But we don’t want to make safe films. We want to keep breaking barriers in story and animation. Our story team is like no other. It has incredible vision and depth. We have to rely on it.”

Bless John Lasseter.

“We have to trust our story team,” he went on. “They have to believe we trust them.” “So what you’re saying,” Steve said, “is that we should bet on our creative talent, no matter the risk.” “Yes,” John replied. “I know that’s asking a lot, but it is what I think we should do.” What John was asking us to do was unprecedented. He wanted us to put all creative approvals in the hands of Pixar’s story team. It just wasn’t done. Disney had never done it. And those few directors in Hollywood who did have complete approval over their films had long track records of making iconic films.

I’m going to talk about these types of paragraphs and leaderhip moments more in Creativity Inc.

At this point, my job as chief financial officer should have been to remind Steve about the huge risks of cost overruns, to cite cases of films notorious for budget excesses and box office disappointments, and to recount the dangers of creative teams running amok. By this time I was aware of examples of all of them. I didn’t bring them up, though. That wasn’t why I came to Pixar. I came because I had believed in Ed, John, and Pixar’s team. Now, I found myself surprised to find Hollywood so risk averse. I loved the idea that filmmaking could use a dose of Silicon Valley bravado.

You know the culture is real when even the CFO - the calm dispassionate one - is swept up in the vision.

John was not saying, “Bet on me.” He was saying, “Bet on our team; bet on our process.” He would be the first to say how much that process relied on the relentless critique of each other’s work and the willingness to put aside ego just enough to hear that critique. When I added it all up, every start-up impulse within me said this was the time to bet on our team. That would be the Silicon Valley way of filmmaking. No hedging. Bet on innovation. Bet on greatness. Take the shot to change the world.

You are in the risk seeking business! If you’re not going to bet on your talents, what is the point?

Creative excellence is a dance on the precipice of failure, a battle against the allure of safety. There are no shortcuts, no formulas, no well-worn paths to victory. It tests you constantly.

I love this. It’s, in the words of Paul Allen’s mother, edgewalking.

But there are moments when principle matters, and this was looking like one of them. There was no way we were going to feel great if we ceded to Disney on the branding issue. And at Pixar it was vital to feel really good about what we were doing. It went to the core of our culture. How could we make great films while seething over someone else taking too much credit? It wouldn’t work. “I’m on board,” I said. “We have to live with our choices, not just profit from them.”

[sic]

Of all the deals I had ever completed, I don’t think I ever felt more elated.

It ends up not mattering in the long-run, of course - Disney ends up acquiring Pixar.

For a long time afterward, whenever Steve and I passed a Disney store we would run in to examine the Buzz and Woody dolls and other merchandise from Pixar films. We would look at the tags so we could see the Disney • Pixar logos equally displayed on the back. I am quite certain there were no others in the store who were smiling so gleefully at the tiny logos on the back side of the labels.

This is adorable.

Although I found Steve to be quite a private person, when it came to the public eye, he didn’t like to share the spotlight. His ability to weave stories around big ideas was legendary, and he applied them with equal force to his own story. Working for Steve meant working in the shadows; he wasn’t terribly generous when it came to publicly sharing credit.

This is really bad. Elon operates in the same way.

We had accomplished in two and a half years what we thought might take ten. With the IPO and the Disney deal behind us, Steve was more relaxed. He would often stroll over to my home on the weekend and we’d go for a walk or sit in the backyard and talk.

These must be the most legendary walks of all time.

“I’m not certain,” said Steve, “but I could try. I wouldn’t even take a salary. I’d have a chance to share my ideas and to assess what needs to be done.” As soon as Steve said this I realized he had made his decision. Steve wasn’t sure Apple could be saved. And the last thing he wanted was to return to Apple and then be held responsible if he failed to rescue the faltering company. Not taking a salary was a way of saying, “You’re not paying me so don’t blame me if the company sinks.” If he did turn it around, there would be ample opportunity for reward later. It was a no-lose scenario.

[sic]

What I surmised Steve had wanted in this conversation was to make certain we wouldn’t think he was abandoning Pixar. In a way, he wanted Pixar’s tacit permission and blessing to go back to Apple. I knew he would have the same conversation with Ed and John.

Watching Steve talk himself into going back to Apple over the course of these walks is amazing.

After a rocky relationship with Pixar that had lasted the better part of ten years, Steve had gained something that was sorely missing when I joined the company: respect.

Well, he finally made good on his promise financially. He got out of the way and let the creatives do their thing. And they all won. Victory solves all problems.

At the end of the screening, John turned to Steve and said, “Steve, what did you think?”

“Looked good to me,” said Steve. “Though it doesn’t really matter what I think.”

“It does matter,” John insisted.

“No. You guys decide,” Steve said. “I trust you.”

“But we want to know what you think,” John said emphatically.

It was a small moment, one that I doubt registered with anyone. For me it signaled something that I had never seen before at Pixar. The creative team, the team to whom we had long ago ceded all creative responsibility, cared about what Steve thought.

I love this scene. Nearly every book you read, Pixar is credited with making Steve a much better manager and CEO. It’s easy to see why.

Gone were the second-guessing and posturing that had characterized Steve’s relationship with Eisner. With Iger there were no games, no politics, no posturing. He was smart, straightforward, and up-front. It was the most positive meeting between the two companies at that level in a decade. Steve took an immediate liking to Iger, which would blossom into a close collaboration and friendship. Moreover, Iger made it clear that animation was very important to him, and to Disney. He said it was the heart and soul of the company and bringing it back was central to his vision for Disney. Iger did not have to be so forthcoming with us about this. The more he claimed Disney needed animation, the more leverage Pixar might have. But that was his style. With Steve, it worked like magic.

There’s a reason so many consider Iger to be the GOAT.

On January 24, 2006, Disney announced it would acquire Pixar for $7.4 billion. Steve still owned just over 50 percent of Pixar, giving his Pixar stock a value of almost $4 billion. In an instant, he became Disney’s largest shareholder.

I did not realize that Steve Jobs was Disney’s largest shareholder. Wild.

This was hard for me to admit. Every morsel of the lawyer, CFO, strategist, and board member in me told me the sale of Pixar was the right move, the fitting move, the best possible endgame in this phase of Pixar’s history. Of this I had no doubt. But it also spelled the end of the road for Pixar and me. As soon as Disney bought Pixar, Pixar’s board of directors dissolved, and all my formal ties to Pixar would come to an end. My journey with Pixar was over. Almost twelve years had passed since that first phone call from Steve. Twelve years in which I hardly remember a day when I didn’t feel responsible for Pixar’s well-being. Even after I left my day-to-day duties, while I was a board member barely a week or two went by without some discussion with Steve that related to Pixar. Worrying about Pixar had been a big part of my life. “Maybe letting go of Pixar is harder than I thought,” I said.

I can only imagine how hard it is for entrepreneurs to go through this type of sale.

I had never realized this was how people felt. For a person who had all but gone out of his way to keep his personal and business lives separate, I had utterly failed.

And yet, those are the happiest people.