A Call To Leadership

EP152: How to Win Big, The Pixar Story Part 1 with PJ Accetturo

August 02, 2023 PJ Accetturo
A Call To Leadership
EP152: How to Win Big, The Pixar Story Part 1 with PJ Accetturo
Show Notes Transcript

Let's delve deeper into the inception of Pixar as we examine the factors contributing to its remarkable achievements. We're thrilled to have PJ Accetturo on the show to help us explore Pixar's leadership and the path they took to become the world-renowned company we know today. Tune in now to join us in this insightful discussion! 



Key takeaways to listen for

  • Why leaders need to nurture an environment that fosters creativity and innovation
  • A quick look at the early days of Pixar
  • Pixar's relentless quest for technological advancement
  • Notable challenges in Pixar's leadership journey
  • How Pixar struggled to produce high-quality films



Resources Mentioned In This Episode


About PJ Accetturo
PJ Accetturo is an award-winning filmmaker, Youtuber, and tech entrepreneur. By the age of 18, he was published in National Geographic and featured on the Discovery Channel.

In the subsequent years, he managed Threshold 360, a Virtual Reality company, and created a Youtube channel with his father, ‘VoiceoverPete’. In six months, they reached 1 million subscribers and amassed over 22 million views, working with brands like Toyota, and some of the biggest Youtube stars and video game companies.



Connect with PJ
LinkedIn: PJ Accetturo



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[00:00:00] Dr. Nate Salah
One of the problems you and I face in business is how to overcome the massive obstacles that plague our daily work. There's no perfect recipes. There's no neatly designed steps, I wish there were, to pull out of some kind of a master guide, master manual to be courageous in this situation or to go all in in this situation. Leadership doesn't have easy answers. So what do we do? Just throw our hands up, give up. No, we fight for what we believe to be. Be purposeful, meaningful, thoughtful. And that's why I've invited my dear friend and mentee P.J. Acceturro back on the show to help me unpack a journey that is sure to inspire, to motivate, to galvanize you when you are against the wall.

[00:00:51]
The story of a company that almost never got airborne. The story of Pixar. Let's join the conversation in this two part back to back series. I can't wait for you to join. Join us. I'm Dr. Nate Salah. And this is A Call to Leadership. P.J.. We're back. Great to have you back, man. And I'm so thrilled to work through this series with you on what I would classify as one of the greatest business success stories in modern history, the story of Pixar. And the story of Pixar, many people know of Pixar. They know of the movies and they've seen Monsters, Inc. or Toy Story. And of course, all down the line, many, many Pixar movies. Huge success. And they've seen this Pixar slash Disney on a lot of the media. And now it's... Disney owns Pixar and there's a lot of ambiguity in how this happened and why it's so important and why it's so relevant for how magic can happen, but it's not really magic at all. It's a lot of planning. It's a lot of great leadership and I think it's going to be really exciting to unpack it with you. 

[00:02:09] P.J. Acceturro
Yeah. I'm so excited too. Cause I think. It's one thing to study companies, I keep throwing Amazon under the bus, but like Amazon who just have like kind of brick and mortar, like, oh, man, it's nuts and bolts. That was a really wise or sound approach. But I think the beauty of Pixar, aside from the crazy sort of Hollywood like journey, ironically, they had into Hollywood is that it's a marriage of sort of artistry. And entrepreneurship and I think that is what I feel like if you're a listener and you're really trying to get some good takeaways, I mean, truly, even if you're not sort of in the artistic space like I am, there's so many great takeaways just for management and like and fostering creativity and innovation and I think every business can benefit from learning how to foster an environment in which creatives can thrive. 

[00:02:55] Dr. Nate Salah
Yes. And I would add that every business will die if it does not foster creativity and innovation. And innovation need not be a bad word in terms of it's so incredibly high of a mountain to climb. It's just ideas. Because one of the essential factors of leadership is new frontiers. And also, our customer doesn't want to invent our behalf. They want us to invent on their behalf and context are constantly changing. And if you don't invent, if you don't innovate, someone else will. 

[00:03:36] P.J. Acceturro
Blockbuster huge, huge disruptors in the industry back in sure that, you know, 80s, 90s, but they did not innovate. And so I think if we're not hungry, it will be the death of us. You know, if we're comfortable, Comfort is the enemy of progress. Yeah. Someone told me that daily from Nate. Yeah. Yeah. I just think it's imperative to any entrepreneur and to learn, you know, sort of fostering and really an environment at which not just your creativity can thrive, but your team's creativity is valued. And fostered and then obviously they're able to execute and you can do so much more than you ever thought you could just on your own ideas and creating that as an environment.

[00:04:15] Dr. Nate Salah
Agreed. Yeah. And that's, I think what's an area that I think we'll revisit again and again through our conversation is the value of the team and having the vision, the tenacity, the forethought and the communication of giving permission. To invent in an organization and watch the beautiful ideas begin to emerge. In fact, I believe that you're every member of the organization from the front line all the way up is responsible for progress. And I think that's ultimately what our goal is in an organization to continue to progress. Because as soon as we stop progressing, we burn out.

[00:04:55] P.J. Acceturro
Right. And then we actually, we lose our sense of purpose. Yeah. So it's cool to be here with you today because I think you represent historically more of the entrepreneurial perspective, given your background, your businesses, and I'm more on the artistic side, you know, being a filmmaker in the past and sort of now more managing a TV show, you know, as a creator.

[00:05:12] Dr. Nate Salah
So let's just dive right in. I think it'd be good to help our audience to understand some of the foundations of where Pixar was in the early days, how it even, you know, some of the key players and then kind of the transition because a lot of people don't know this, but Pixar was not an animation company. It didn't make movies when it first started.

[00:05:30] P.J. Acceturro
And I think what's crazy is people don't realize that George Lucas was a key contributor to Pixar and then Steve Jobs was. 

[00:05:40] Dr. Nate Salah
So I can't wait to drop some bombs on our folks about how Steve Jobs, what his contribution was, because we largely associate jobs with Apple, but Pixar was really the business that put him back on the map right after about close to at least a 10 year lull. Yeah, nobody remembers next computers. All right. But that was the next iteration after he got demoted from Apple. So George Lucas. Okay. Who is George Lucas? 

[00:06:05] P.J. Acceturro
Yeah. I mean, George Lucas is Star Wars. Right. But before then, I mean, Ed Catmull was born in 1945. Yeah. 

[00:06:11] Dr. Nate Salah
And who's Ed Catmull? What's his role? 

[00:06:12] P.J. Acceturro
Thank you. So Ed Catmull is the author of Creativity, and he is sort of the CEO slash founding member essentially of Pixar. But Pixar started for him, started as a dream, you know, when he was a kid growing up watching Disney animation back in, you know, the 50s essentially, right? And I think he was always really fascinated by not just the emotions the shows made him feel, but the how. Because it was magic back then, it really was, there weren't a lot of things like Disney. And basically, as he got older and started to study in school, he became fascinated by the development of computers. And he thought, one day, you know, what if we could do more than just hand-drawn artistry? What if it could be more efficient if computers were a central part of the animation process?

[00:06:59] Dr. Nate Salah
Which is important that he was influenced in the fifties by Disney because what was happening in the fifties when he was a kid is the formation of the park, which was Magic Kingdom. Now, What was important about that was Walt had a good 20-plus years of animated stories that he was then taking to a new medium where he was going to create a three dimensional experience of those stories. In the park. See, this is what had never been done. So this is really critical because when we fast forward to later with what was happening with Pixar, think about the 2d animation, right? It almost looks in three dimensions when it's now in the computer animation. Right, right. So this would have been really important for Ed because this was an experience that led him to see how we can actually create a greater dimensionality out of story through what Walt Disney was doing with the park. And what would later happen with him at the helm at Pixar. 

[00:08:02] P.J. Acceturro
Yeah. And so I think for Ed, he was always about being on the edge between technology and artistry. A lot of times we don't always think about great artists is also sort of great inventors, great engineers, and not even that necessarily Ed. Was the one who was programming all of the facets though. He did do a lot of programming and his time. It was more about him having the vision to help creatives and engineers sort of create these new things. I mean, I'm trying to think of seminal films back in the 80s. More 80s is where computer animation started to really take mainstream like Terminator. Those was the first First major film to feature sort of big quote unquote, as we know it today, computer animation, which was absolute breakthrough. But what people don't know is that sort of science fiction realm, we've seen a lot of computer generation. There was 2001 space odyssey, and then there was star wars and, you know, 2001 space odyssey was a Stanley Kubrick kind of cult classic film, but it didn't have a really big market.

[00:09:04]
But then started Lucasfilm and industrial light and magic as a special effects division. And 2001 space odysseys team, and then that's how we created star wars. And so that really began. I think the science fiction revolution and sort of the need and cat mill would have been very influenced by all of this. Probably around this time is back in the kind of the late 70s, early 80s. And this is when Ed was probably just finishing college. He had had a degree, I think, actually initially in engineering. And then he got an opportunity to have an internship at this sort of New York Institute of Technology and work for this guy named Alex Schur. And Alex Schur was like a multimillionaire and he wanted to do experimental technology sort of with like creating computer generated films, which had not been done at that point. Again, like there's elements of computer generation in the industry, but no one had ever done an entire film before. 

[00:09:59] Dr. Nate Salah
Right. Like what you saw, like. Roger Rabbit or different aspects of where the computer generated element was in the movie, but not entirely, but I even think with Roger Rabbit, it was animation over top, right?

[00:10:07] P.J. Acceturro
Traditional thing. So it wasn't even C. G. I. Yeah, C. G. I. Like, really? I think actually, Ed was one of the first pioneers, probably even back in the seventies or whenever he was started. Anyway, it's fascinating to see sort of his relentless pursuit of that and how that sort of the different turns he had to have over the years. To end up at Toy Story, you know, and that's kind of where we're headed. Hopefully with this episode is sort of how he started. And really, I think so many of the takeaways I was learning is that we can have these broad visions for what we want in our future, but the road it takes to get there is anything but. Clear. Right. And we'll see Ed ping pong ball back and forth between companies, various visions for even companies he runs, which aren't his eventual vision. He's just kind of pivoting opportunities that are around him. 

[00:10:57] Dr. Nate Salah
Right? Yeah. And at the same time in the mid-seventies, Steve jobs is on his side of the equation is beginning to venture in the tech world himself in a greater context with the Apple. 

[00:11:10] P.J. Acceturro
I guess give us a parallel background with Steve Jobs and Apple at this time. You bet. 

[00:11:13] Dr. Nate Salah
Yeah. So him and his partner, the other Steve, Steve Wozniak create this Apple One and it's a revolution, if you will, and personal commuting that really there was no such thing as personal computing as far as we know it today. Right. It was just hobbyists and builders and he wanted to take the personal computer and fill homes with it all across the globe. And what he wanted though, what was really special was the user experience was to be exquisite and he was an artist himself. He took calligraphy classes and he wanted beautiful fonts in the computer. He wanted the aesthetics to be pleasing. He wanted the user to be drawn in irresistibly, and this philosophy of business would be something that would carry through to his involvement at Pixar later, which would have been about a decade later when he did in fact get involved with Pixar. So this is 1976, Apple launches, 77, 78, the Apple II, and of course the Apple III and so on. And through the late seventies to the early eighties, there's a couple other, there's the Mac and the Lisa that are in production. And by end of 84, early 85 jobs is having a lot of trouble at this point with Apple and the board and very maverick approach still. And they were becoming a big boy company. You know, they were growing up. And Jobs was seen as a possible liability for that. 

[00:12:48] P.J. Acceturro
Right, because I think he had yet to learn empathy, and he had yet to sort of have more of a rounded perspective that he came to find later. 

[00:12:57] Dr. Nate Salah
Indeed, yeah, and even through Pixar. So, believe it or not, he wanted Apple to buy Pixar while he was still at Apple in the mid 80s. And it's little known fact that it was rejected. Apple was not interested in buying Pixar. And as soon as he got demoted in the mid eighties, 85, he quit essentially kept one share of stock because he sold all the stocks up for one share. So he could sit in on the shareholder meeting still and promptly went to Lucas. Right, right. Okay. 

[00:13:29] P.J. Acceturro
So let's. To purchase a walk back to get cat mall meeting Lucas. So around this time, I believe this is sort of early eighties. So Lucas had been on the heels of star wars. He had been really trying to develop a lot of proprietary technology for star wars and creating industrial line magic. But I believe actually, at this point, he had was going through his divorce with his first wife, Martha. And that divorce was so costly that he had to start to sell off a lot of assets. And so Pixar was sort of his sort of dream to have create computer animation equipment that can create for his brand.

[00:14:07] Dr. Nate Salah
So it was a hardware company. It was a hardware. There was some software. 

[00:14:12] P.J. Acceturro
It was primarily hardware because they really didn't have computer animation sort of focused hardware back then, you know, in the eighties and mid-eighties. And so these computers were expensive. They were 100, 000 plus a pop as we'll learn in a minute. When Steve jobs comes in. But anyway, it was just kind of bleeding capital, I think, for Lucas in him sort of buckling down with Lucasfilm. That's when sort of he met Steve Jobs and all that. 

[00:14:37] Dr. Nate Salah
Yeah. Yeah. From there. So just as you said, yeah, it's just like, well, can I liquidate? And, uh, so Steve Jobs comes along and said, well, since Apple wasn't going to buy. I want to buy it and he took 5 million bucks, gave it to Lucas to buy Apple 5 million to capitalize. So a 10 million investment and he was the new chief of Pixar. Now at the time, of course, he got introduced to the leadership staff, which was Catmull and John Lasseter, who we'll learn more about, who's one of the visionary minds behind many of the stories that are attributed to Pixar's success. He wasn't as prominent in those days. He was certainly an important piece. 

[00:15:17] P.J. Acceturro
Because he was at Walt Disney Animation, and he was responsible for a lot of some of their hits. And I think that Jobs and Ed Catmull were able to kind of lure him away. You know, it's like, you have more control. More autonomy, less, you know, hierarchy.

[00:15:31] Dr. Nate Salah
I actually thought he might have been terminated from Disney. And so I think that's an important piece too because they try to get him back later. That's right. Yeah, yeah. We'll talk about Michael Eisner too because that'll be an important piece. So what Jobs comes in and what's brilliant about Catmull is he is able to understand Jobs's nuances of leadership, right?

[00:15:53] P.J. Acceturro
Which was a little, uh, Acerbic at times back then.

[00:15:56] Dr. Nate Salah
Yeah. At the time he had some challenges with communication and how he communicated his values. There was a lot of friction, even within Pixar with certain members of the Pixar team. But he did give creative control, allowed creative control. To and the team as even they began to embark on this journey of, you know, how are we going to make Pixar profitable? Right? But he was actually trying to sell Pixar. Most of the journey through there because he was losing money. There was not a year where Pixar was profitable under jobs until. They went public. Yeah. 

[00:16:36] P.J. Acceturro
And so I think for Steve Jobs, you know, he's sort of what he'd probably sell his Apple shares at like 100 plus million between 100 and 150, maybe or something like that. So he's looking, of course, to kind of make his brand with next computers. I think Pixar was a bit of a plan B to some degree because next computers probably was more of the personal computer kind of competition Apple, but this is more of his hope for a higher end, right? 

[00:17:01] Dr. Nate Salah
That's like a business use. Well, yeah, I mean, in some ways. So what he wanted to do was hit the education market with next. And so he had a hardware division, software division, and he had these machines. I think there were like 15, 000. And of course, at that time. So cost prohibitive. They did phenomenal things as far as the word processing and different aspects of it. Just amazing. But it was not profitable at all. He ended up closing the hardware division. So he's hemorrhaging cash through Next. He's hemorrhaging cash through Pixar. 

[00:17:29] P.J. Acceturro
And part of that was because it was just cost of production back then. Like their computers, they thought, well, let's price them high because they're one of a kind. So they priced the Pixar computer at 100, 000 and then they immediately got a branding of all those guys are like too expensive. So we couldn't bring down the price later like they were already known and they really just couldn't get much sales off the ground for the Pixar computers. 

[00:17:53] Dr. Nate Salah
And I think Jobs to an extent as well. And of course, John all understood that it was always about making a movie. 

[00:18:02] P.J. Acceturro
Yeah. And I think they just tried to have a split focus because. They were still developing the technology over the course of the 80s and really into the early 90s to make a movie. Like if you gave sort of Ed and John back in 86, you know, Pixar was acquired by Steve Jobs. They didn't have the technique for hair. They didn't have the technique for some of the faces. I think that's what a part of the company was doing was creating the more of the software components. To be able to program what they wanted to do and how they were getting their reps in was John Lasseter was making these short films so that first they made the Larry the lamp, which we all know is the intro sequence in any Pixar film with the lamp, but that actually got nominated for an Oscar and then he moved on to, I think, like a tin cup man or something like that, which would want an Oscar as a short.

[00:18:52] Dr. Nate Salah
So I think initially trade show awards were the first sort of small victory, right? I think that's important even like to sort of do a side note is that these small victories are a way to build courage. And so that's important for our listener who is considering, okay, well, I've got this grand idea, but. Maybe the tech, the world, the market, the context isn't ready. So you've got to continue to do what you can in other areas as the context becomes ripe. In other words, until it's ready to converge. And 

[00:19:25] P.J. Acceturro
I think that's in a sense why sort of diversification at your company is important. In a sense, like if they went all in too early on computers and multimedia, like trying to make a film, they would have crashed because they didn't have the ability to do it yet. And then eventually later, if they went all in on just hardware, they would have crashed because, you know, the world couldn't afford it. They didn't want it. So, that's the discovery phase, right, of any sort of visionary process.

[00:19:48] Dr. Nate Salah
Absolutely. Yeah. And so, as far as, you know, this relationship between Catmull and Jobs, and of course John Lasseter to an extent as well, there's a symbiosis between the three of them. And where I think that's important to kind of talk through like this journey from 86 to 95 in this 10 year march, if you will. I mean, a lot of stress too, by the time across that time span jobs had, I think lost about $70 million Yes. Of his own money. Yeah. Again, 

[00:20:22] P.J. Acceturro
Yeah. Again, I think it's, he's around the a hundred million dollar mark of net worth.

[00:20:25] Dr. Nate Salah
So you got like 30 million left. Now, granted for most of us, right, $30 million is a lot of money, but this is money down the drain.

[00:20:30] P.J. Acceturro
It's not like investments or something that it's very risky. 

[00:20:36] Dr. Nate Salah
So if your actual valuation of the company was $5 million and you've invested 70 million, you know, if I was Steve Jobs, I'd be thinking, well, crap, I can only get $5 million for this company as it stands right now, and I'm already out another 65, right. Plus my other five that I invested, whatever. 

[00:20:51] P.J. Acceturro
Yeah. So, right, right. 'cause what if it is, even if you could get. 20 or 30. What if it's a dead horse, you know, later. So he was courting throughout the whole time. He was courting other companies like Microsoft who were offering him, you know, at one point they did offer him 90 million and he refused it. And he thought it was so insulting, so insulting of an offer that he closed discussions with them. And Ed was reflecting, he said like, Part of that process was sort of Steve just waffling of like his heart. I think telling him he knows the worth of a company like this, but also just trying to be responsible steward of his dwindling fortune.

[00:21:29] Dr. Nate Salah
Right? Yeah. Well, and I think one thing that resonated with jobs is he realized that. He even said that Pixar was really at his heart. I mean, in terms of business, certainly Apple was his foundation, his baby. But what he said was that these cell phones that we create, all of this tech devices, they end up in a trash heap eventually. These stories will remain with families and individuals forever. 

[00:21:53] P.J. Acceturro
And that's so true. Moana. And I'm sure anyone who has kids, you know, their kids have seen Moana and they've seen Moana 90 plus times. I think honestly, like does more for those kids than having this tablet over that tablet. Now I love Apple products, but truly like Pixar films are a sort of our modern cultural mythos in which we have value formation as kids.

[00:22:18] Dr. Nate Salah
Yeah. So let's talk about what's happening at Disney. Well, Pixar is beginning to get some notoriety. 

[00:22:25] P.J. Acceturro
Yeah, so they're getting notoriety in the Oscars. So my guess is at this point, kind of in our journey, we're in the early 90s, probably like 92. Actually, they worked on Toy Story for five years, and they've released it, I think, in 95. So this would be like 1990. 

[00:22:40] Dr. Nate Salah
That's kind of where we are at. Yep, about 1990, and Disney animation is fizzling. Right. Nothing new under the sun, no real innovation, and They're struggling. Animators are being fired. 

[00:22:55] P.J. Acceturro
It's an ugly scene and part of that is they did obviously have a bunch of hits like the Lion King, like Aladdin and some of the others. But the problem is after the sort of big hits they had, they essentially had such bloated budgets. That they sort of had to continue feeding the beast and so they realized that the most successful sort of financial model was to do direct to DVD sequels. So all of us have seen Aladdin, but very few of us have seen Aladdin 2 or I think there's a bunch of weird sequels to these classics. Because again, from Disney sort of franchise mentality, it was a profitable business model, but Pixar sort of was founded in the antithesis of that. Ed camel later says quality is our business plan. It's not about quantity. It's about quality. 

[00:23:46] Dr. Nate Salah
Yeah. And that quality fed these relationships, of course, we have to bring John Lasseter in to the conversation because he's been called the second Walt Disney in terms of his genius in story. Right. And of course, Disney, I'm sure lamented for years on that exodus, but they ended up getting back later. We'll talk more about that. But the heart of his story was so compelling. And his ability to personify whatever the movie was, whether it's toys or a lamp or anything else. 

[00:24:18] P.J. Acceturro
Um, and the anthropomorphize. Yes. Human characteristics and non-human things essentially.

[00:24:24] Dr. Nate Salah
And Steve Jobs picked up on that. He picked up on that ability. And I think that's important to recognize is when you have exceptional talent and that transition. Because they were doing hardware and they were selling their software. But to transition from. Okay, this is our one business vertical, and we're going to move into a entirely different vertical that none of us have the long range exposure or experience in, running, daunting. So at this stage, Steve Jobs in his true form starts thinking, who else can I bring into this equation? Well, he brings in Lawrence Levy, I don't recall the year exactly, but in the nineties, early nineties, maybe the mid to start talking about. How we're going to transition Pixar when something big happens, because now they're in negotiation with Disney.

[00:25:17] P.J. Acceturro
Right. So, yeah, I mean, as memory serves, Disney is looking for a way to break their dry spell. They're looking for a way to innovate. Michael Eisner, right, is in command of Disney, and I think they see Pixar is not a threat. But a new opportunity to innovate, right? You know, they're small. They haven't made any films and yet they're creating a lot of buzz So actually Pixar was doing some advertising. They did a bunch of animated commercials So they would prove their chops that there's demand and there's innovation And so they did a partnership deal where they said let's create a three picture deal. We'll distribute the films You create the films and we'll fund it. And so initially they wanted to essentially kind of acquire them without acquiring them. And so they, in the terms, it was like, okay, we want the rights to kind of own your computers and own the software in the process. But Steve pushed back than that really hard. He said, you're just paying us to bake the cake. You're not paying us to show you how the cakes baked.

[00:26:14] Dr. Nate Salah
It's important because, well, there's a great deal of not only bravado when you approach that with Disney. Now, keep this in mind. You're 70 plus million dollars in debt. Your other company next computer is not doing so hot, right?

[00:26:33] P.J. Acceturro
It's pretty easy to pitch like, yeah. Especially because Eisner is Michael Eisner. I mean, when he was a hard hitting businessman, very savvy, extremely crafty, and it's the CEO of Disney. Like I'm sure we'd like to think of Steve jobs as if. We think of him now, but really he's sort of origin tale. He, this is his post fall from grace. So he doesn't have as much sort of social cloud as we attribute him to him now. 

[00:26:55] Dr. Nate Salah
Right. Yeah. He was on the verge of being a one hit wonder. Well, my friend, how about that for a cliffhanger? Almost a one-hit-wonder indeed, but that's not how the story ends. In fact, so many amazing things happen when we've got to take the time to listen in. The good news is you don't have. I've reformatted the show. And now this is going to be back to back with our multi-part series. As you asked, you got, so just in two more days, you're going to get to hear the second part of this amazing story with my friend, P.J. can't wait for you to listen in, have a wonderful rest of your day.