October 11, 1995: Steve Jobs is submitting papers for the listing of Pixar Animation Studios.
A turning point in Jobs ’life, Pixar’s public offering turns him into a billionaire. But things almost don’t turn out so well.
Pixar IPO: A turning point for Steve Jobs
Maybe it’s because I write for a technology page, so Steve Jobs is always the focus on Apple and NeXT, but Pixar often seems underrepresented when people talk about the lives of Apple co-founders.
Sometimes written off as a sideline for Jobs, his work at Pixar showed his long-term vision. It also symbolized his post-business struggles after Apple and eventually his stunning turnaround and reinstatement as CEO.
Pixar also marked Jobs’s entry into the entertainment industry, which eventually made him the Walt Disney Company’s largest shareholder, and laid the groundwork for relationships he would later use for iTunes.
How Steve Jobs bought Pixar
Pixar was founded by Alvy Ray Smith and Ed Catmull. The animation studio originated from the computer graphics laboratory of George Lucas, the director Star Wars. When Lucas went through an expensive divorce, Jobs bought out his share of the company.
Jobs first heard of Pixar’s work through Alan Kay, the legendary Xerox PARC computer scientist who continued to work for Apple.
During the negotiations, Jobs dissuaded Lucas from an initial offer of $ 15 million for his Pixar share and a guarantee of another $ 15 million to finance the company. In the end, Jobs paid only $ 5 million and a $ 5 million guarantee to fund 70% of Pixar. The deal was struck Feb. 3, 1986, shortly after Jobs left Apple after a failed coup in the boardroom.
Although Jobs did a good job, it was a risk at the time. Pixar needed money to continue its business. Moore’s Law meant that the company stayed a decade away from realizing Smith and Catmull’s dream of creating a completely computer-animated film.
Pixar: Film studio or computer company?
Coming from a sales environment, Jobs thought Pixar could pay for its trip as a hardware and software company for creatives – basically the same terrain it used at Apple.
Pixar had two major products for sale: RenderMan, a 3-D graphics program that still exists today, and Pixar Image Computer, a state-of-the-art supercomputer. The Pixar Image Computer proved to be an unlimited sales disaster. The computer sold less than 300 units during its lifetime.
The main problem with the computer was its insanely huge price. The machine cost $ 135,000 to purchase, but it also required a $ 35,000 workstation from Sun Microsystems or Silicon Graphics. The second-generation version sold for “only” $ 30,000 — which is still beyond the reach of regular customers.
The bleeding money, the only thing that kept Pixar alive during the late 1980s and very early 90s was Jobs ’pride. He didn’t want to be seen as a miracle worker founded by Apple and then advertised with NeXT and Pixar.
Pixar IPO makes Steve Jobs a billionaire
Luckily, Pixar reached an agreement with Disney and started working on his first feature film, Toy Story. Sensing a big hit, Jobs applied to release Pixar on this day in 1995. The IPO followed on November 29, 1995.
The Pixar IPO made Jobs a billionaire at the age of 40 and set the stage for his stunning comeback.
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