- [Voiceover] Most of us know Pixar as the established

dominating animation studio that it is today,

responsible for some of the greatest

animated movies of our time.

But the truth is that this massively successful studio

came from a very humble beginnings.

In fact, on it's first few years

the studio was constantly on the verge of bankruptcy,

losing millions of dollars

even after the success of Toy Story.

In this video I'll tell you the story behind Pixar

and how founding it was made possible thanks

to three very different people

with very different talents.

(popping)

(rhythmic techno music)

The story of how Pixar came to be

revolves around three major players,

an artist,

a scientist,

and a businessman.

All three working together yet separately

to one day find each other and create something amazing.

The artist of this story is a guy

named John Lasseter.

You've probably heard that name.

John would become an Academy Award winning director

responsible for some of Pixar's greatest films

including Toy Story.

But back in 1975 he was a freshman

at a brand new program at CalArts

learning Disney style animation.

The program was taught by industry legends

including some of Disney's Nine Old Men.

His classmates included Tim Burton and Brad Bird

who would later become prolific filmmakers themselves.

This was a very exciting and creative environment

for an animation student.

During his time at CalArts John created

two student Academy Award winning films

and after graduation he got his dream job,

he was hired by the Walt Disney Animation Studios.

(dramatic music)

During his time at Disney working as an animator

he stumbled upon computer animation.

He had an idea for making an animated film

using computer graphics for the environment

and pencil animation for the characters.

He pitched that idea to Disney executives

and they told him,

"The only reason we would consider

"using computer for animation

"is if it will make it faster or cheaper."

Shortly after that pitch John was fired from the studio.

At about the same time George Lucas

hired a guy named Ed Catmull

to develop a film editing system

and digital sound editing system,

all to advance the computer graphics

and create ground breaking visual effects for his films.

Ed Catmull grew up loving animation,

watching cartoons and all Disney films

his entire childhood.

He gave up his dream of becoming an animator,

thinking he wasn't good enough

and pursued a career in science.

He studied computer science in the University of Utah

where he earned his doctorate and has made

ground breaking work in the field of computer imagery.

He was then asked to run the computer graphics lab

in the New York Institute of technology.

Ed was a brilliant scientist responsible for some

of the most commonly used principles of computer animation

such as Z-buffer,

texture mapping,

and subdivision surfaces.

He basically invented 3D graphics as we know it.

While working at Lucas Films

Ed asked John to join his division

after meeting him at an industry event.

Nothing having the same dream of one day

making the first computer animated feature film.

The two hit it off right away,

but at that time,

1983,

that dream was still far away.

(lighthearted music)

That division in Lucas Films,

then called the Computer Graphics Division,

produced some of the most revolutionary

uses of computer imagery in films for that time.

They produced the first completely computer generated

scene in Star Trek Wrath of Khan

and the first computer generated character

for Young Sherlock Holmes.

Within that small division John made the world's

first animated short film using computer animation,

The Adventures of Andre and Wally B.

Creating such complex imagery required building

a powerful custom made computer.

That computer was called the Pixar Image Computer.

Because of the high demand for computer imagery

and advanced computer graphics in other industries

the computer graphics division was reimagined as Pixar.

Still dreaming on making a computer animated

full length feature,

a dream George Lucas had no interest in,

Ed looked for an investor to find

such a huge undertaking.

But for a long time there were no takers.

Meanwhile at Cupertino,

Steve Jobs who was recently fired from Apple

founded his next company called,

well, NeXT.

Steve was one of the prospect investors

called to take a look at Pixar

and he decided to invest.

He bought Pixar from George Lucas for five million dollars,

throwing an additional five million

to keep the company running.

After the acquisition the team wanted

to make another animated short to establish who they were

and stay on the track of filmmaking.

John, who loved animating inanimate objects,

single handedly animated a short film

about a lamp and it's offspring titled,

Luxo Junior.

That short film was later nominated

for an Academy Award and was the first

computer generated short to ever receive that nomination.

The lamp from that film then became Pixar's mascot.

Despite the massive potential though,

Pixar was still struggling.

They were licensing their rendering software.

RenderMan,

which became the industry standard

for visual effects in films used in major pictures

such as Jurassic Park.

But despite that they still couldn't turn a profit.

They started doing commercials,

getting clients like Trident and Tropicana.

They did medical visualization,

seismic imaging,

they sold their hardware,

the Pixar Image Computer, which was very expensive.

Yet with all their effort they couldn't make

their product commercially viable enough

to sustain themselves.

Steve Jobs was losing about one million dollars

every year for five years.

The dire financial problems didn't stop the team

from making more computer animated shorts.

Their third film,

Tin Toy,

telling the story of toys trying to escape

a terrifying baby won the Academy Award in 1988.

Disney, who not that long ago before had fired John,

saw the success of his shorts and asked him to come back

and direct a feature film for them.

This was a life long dream for John

and he was currently working on a company

on the brink of bankruptcy.

Yet he refused Disney

and he stayed with Pixar

still dreaming to make the first

computer animated feature film.

(subdued music)

After the success of Tin Toy

the idea of an entire film from the toy's point of view

stuck with them.

And despite refusing Disney not too long beforehand,

he knew that if he wanted to make a fully length film

they would need the financial support of a larger studio

for marketing and distribution.

Disney was the perfect candidate.

He pitched them the idea and they loved it.

At that time animated feature had only one style,

the Disney style.

That style was so established that when Tom Hanks

was asked to do the voice for the film he asked,

"You're not gonna make me sing, are ya?"

But the people at Pixar wanted to do it differently.

They had a set of rules they set for themselves.

There would be no songs.

♫ Mister I'll make a man

♫ Out of you ♫

No "I want" moment.

♫ I want to be where the people are ♫

No happy village.

♫ Bojour

♫ Bojour

♫ Bojour, Bojour, Bojour ♫

No love story.

♫ Can you feel the love ♫

And no villain.

This went against everything that was

proving to be working in the animation industry at the time.

Despite their drive to do something different

Disney executives were at their backs

giving them notes and ideas.

They were the experienced studio,

they though they knew what makes animated films work.

After a year of preparation,

working on story boards and story reels,

guided by Disney they screened the pitch

of what would later become Toy Story.

Disney hated it.

It wasn't funny,

it wasn't moving,

Woody was a horrible character.

The film was clearly not working,

Disney shut down production the next day.

(lighthearted music)

This could have been the end for Pixar.

However, John did not give up

on the story he believed in.

Within a period of three weeks

with a talented yet small team

he completely re-did the story like originally he wanted to

without all the notes and ideas

from experienced Disney executives.

They had a second screening

and this time the story worked,

production was back on track.

The film took almost five years to make,

and in 1995 it was released to become

the highest grossing film of that year,

making 192 million dollars domestically

and 362 million dollars worldwide.

The film got three Oscar nominations

and John received a special achievement award

for making the first computer animated feature film.

It seemed that Pixar was is the clear,

the studio was now a success and their worries were over.

But that was not the case.

There was one big problem.

According to the deal they made with Disney

Pixar didn't have the rights to any of the profits

for merchandise,

and in fact barely made any money from the film.

They were still struggling financially.

They decided that their only choice was to go public

in order to raise capital.

They went on to be the biggest IPO of 1995,

exceeding even Netscape,

raising 132 million dollars.

(gentle music)

Disney wanted to renew their agreement

to distribute more Pixar films,

and they signed a new contract to produce

five more films together over the period of 10 years,

this time dividing the profits 50/50.

Pixar was still, however,

a single success story so far,

not sure if Toy Story was just a fluke.

So it was their second film that would

determine the future of the studio.

Luckily A Bug's Life would become the most successful

animated film of that year.

The studio started growing rapidly

and their headquarters became too small

to host the number of people in it.

Steve had his eyes on a huge lot in Emeryville

and there he designed the new Pixar headquarters

based around the idea of open space

and unplanned collaboration.