Discover more from iKyu
🪓Pixar: The Pendant of Picasso!
[#1] Tale of Chaos: 4 Wizards, 4 Films, $4 Billion Dollars; One beautiful story!
“Art challenges technology. Technology inspires the art”
We have heard how Humans propelled the wheel of the invention; in Architecture, Technology, Life and Beyond.
Ever heard of a Toy, a rat, a clownfish & a robot defining the next era of human evolution?
Pixar is the Pinnacle of Art in Animation.
But its Business tale is a trove of tyranny, treasure and triumph.
You might wonder:
Is Pixar an animation-tech company or something like ‘infinity & beyond’?
Let’s find out!
First time? Reading iKyu’s breakdowns? Subscribe & never miss our exclusive business breakdowns — Documentary-style!
TALE OF THE TAPE
Before a God, a storyteller is born.
Before an Apocalypse, prophecy is recited.
Before an Invention, art is sculpted.
The History of Pixar is the cornerstone of breakups, risk-taking, and sheer creative flair.
4 Wizards are playing with the creativity baton.
One was a Sailor-focused Film Maker.
One was a Siphoned Scientist.
One was a Business Magnate.
One was an Attuned Artist.
These 4 Pillars are the cornerstone of Pixar.
THE HISTORY OF PIXAR.
*The curtain opens with our artist and flies out to infinity and beyond…*
John Lasseter — a freshman in 1975 was inducted into a brand new program at CalArts.
His whole life was paraded into being a dreamy-eyed artist. He was fascinated with the powerhouse of Design of that time, Disney.
He started learning Disney-style animation by industry legends including some of Disney’s core team members, also known as the “9 Old Men”
During his time at CalArts; John created 2 student academy award-winning short films. His design and animation skills marked him as the crown in a crowd.
He always aspired to work one day under his temple of creative resonance:
Upon graduation, he got his dream job — he was hired by the Walt Disney animation studio.
There he stumbled upon the true limitless power of computer animation, but there was a catch.
Even though Disney had the most fascinating technology to make the best-animated films of that time — it was still a semi-mechanical process.
Lasseter being a dreamer, thought how about using the computational power of Disney’s tech and making an animated film using exclusively computer graphics.
He pitched the same jovial yet revolutionary idea to Disney executives.
Shortly after the pitch, John was fired from the studio.
John sold the future of animation to Disney, and they didn’t bother.
That’s where our attuned artist takes shape as the first wizard.
THE SIPHONED SCIENTIST (and THE SAILOR-FOCUSED FILM MAKER)
Ed Catmull, along with his business partner attended NYIT (New york institute of technology) in 1974.
Catmull had a scientist gaze in himself and a sting for computer graphics.
Catmull and his partner were part of the Computer Graphics Lab at NYIT. They were appointed to lay hold of the power of graphics in computation.
At about the same time in 1979, George Lucas, the sailor-focused filmmaker and owner of LucasFilms was looking to expand his computer division and spotted these nerd’s heads.
He wanted them to join and work for LucasFilms Computer Division as he has a knack of advance technology which would enhance the frame of reference filmmaking.
With Ed Catmull on board, George was enticed to develop a film editing system and a digital sound editing system to advance computer graphics and create groundbreaking visual effects for films.
In 1982, Computer Division worked with Industrial light and magic and crafted this new effect called the Genesis effect — used in blockbuster films like Star Trek: Wrath of Khan!
While working at Lucas films, Ed met John in 1983. As soon as they met, they kindred spirits as they both had the same vision — to make the world’s first fully computer-generated animated feature film.
In 1985, John along with other folks created the first computer-generated character “stained glass knight” in the film Young Sherlock Holmes under the Computer Graphics Division.
Creating such complex imagery required building a powerful custom-made computer, that gave birth to the Pixar Image Computer.
They built state-of-the-art first in its segment Pixar Image Computer to get started but failed miserably.
It cost up to $135,000 to typical consumers, and at this product price point, only 300 units were sold.
Ed and his team were trying to keep their division afloat by selling services and Pixar’s Computer to needles in a haystack — it was not making enough revenue to sustain itself.
This was an inflexion point in Ed & John’s life.
George was losing his trust in this division and was looking to let go of the division.
Ed still fixated on his dream of making a fully computer-animated feature film thought of doing a spin-off of Lucas’s computer division, to keep all the team members intact.
They started calling the newly refurbished division
Now all they needed was some fuel to their fire…Funding
This is how two wizards embarked on their next challenge to find the “Buzz Lightyear” to save Pixar!
What are the odds that “Hollywood-meets-Technology” can revolutionize film industries?
In 1986, on a similar timeline when this pinnacle of animation was taking shape — Steve Jobs was just ousted from Apple Inc.
With his exit from Apple, his relic genius couldn’t stagnate or rest for a *sigh* — he needed to keep the wheel of evolution rotating…
That’s when he founded NeXT — a computer graphics & workstation company; he was also looking to invest in some businesses that align with his vision.
That’s when he caught the attention of our Two wizards, trying black and blue to save Pixar!
In 1986, Steve Jobs bought the computer division of LucasFilms from George Lucas for $5 Million Dollars.
That was also his first investment into Pixar.
Steve’s superpower was to recognize the potential of the technology that is put in use.
Surprisingly, when he met Ed & John, he was already sold to their vision & dream about what Pixar is capable of, as we know by the wand of history he bought into that dream both financially & wishfully.
But then he pitched his idea of what Pixar’s future would look like from here…He wanted them to focus on just improving their technology.
Like any other businessman would want to do: Scale
His peripheral vision was simply inclining on how this company can make revenue out of it for now.
He wanted to create a B2B funnelfor Pixar Image computers so that they could sell its hardware to other businesses for a decent cash flow!
But with the initial reluctance between business & art — the financial aspect of Pixar was weak.
With this pattern echoing again & again — Jobs was not confident about where to sail Pixar along with their crew members!
Until one of the wizards shone the path to the end of the tunnel.
John came up with his own model for business which he thought could make Pixar come out of this quick cash-burningsand.
He knew that Pixar with its demonstration short films & other gimmicks such as advertisements has already found a Product-market fittowards its idea & technology in the market.
Their cohesive work culture and excellent CGIs helped them win an Academy Award nomination for Luxo Jr.
And eventually won the Academy Award for a Best short film for Red Tin Toy.
This was the Eureka! moment for Jobs as he realised the true value of Pixar’s Talent pool.
Instead of selling their animation technology to established film studios, they can use it to create their own content.
With this vision in motion Jobs sold off Pixar’s hardware division to Viacom Systems for $2 Million Dollars.
Even this wasn’t able to match up with the operating costsof the company.
This is the time when Jobs showed off his business mavericks and struck a deal with Disney to produce 3 Fully-computer Animated feature-length Films.
This is the same company that didn’t believe in the Idea of what John sold them 10 yrs ago!
But bygones are bygones & Steve believed in this quote from Wayne Gretzky which goes like this:
“I skate to where the puck is going to be, not where it has been.”
With this spirit, Pixar’s team under Jobs’s supervision & Disney’s collaboration started working on their first film, Toy Story.
Jobs hired great talents for his next pursuit. He hired Lawrence Levy to restructure his corporate culture.
He was prepping up the setup for the Public Offering.
He strategically planned out Pixar’s IPO, just a week after their gigantic release of the first Fully-Computer generated Animated film, Toy Story.
Anything could have happened, but it made history!
Toy Story at its opening weekend broke the blockbuster record with a standalone revenue of $30 Million Dollars; eventually $365 Million worldwide.
Pixar IPOed & it became a huge success, being one of the biggest of the same year, solidifying its place among the most successful companies of 1995.
Pixar finally achieved profitabilityJobs started negotiating with Disney on more contract-based projects, but in 2002 Disney’s CEO Michael Eisner wouldn’t agree to the new terms proposed.
Jobs ended their partnership!
But this was not too soon when Bob Iger joined Disney in 2005 as their new CEO.
Under Bob’s Leadership, he understood, Disney won’t be able to survive with their current hardware setup; looking at their competition of Pixar’s blockbuster movies like Finding Nemo & The In(K)credibles (haha!).
Bob Iger met Steve Jobs to discuss a crazy Idea…
“Disney willing to acquire Pixar”
They both ended up settling a $7.4 Billion dollar Buyout with Ed Catmull & John Lasseter on board with the decision.
Steve Jobs signed Pixar with the Walt Disney Company in January 2006.
Jobs earned a seat on Disney’s board of directors and a 7% company share (marking him being Disney’s largest shareholder)!
Jobs considered, came, collaborated and conquered an industry by being part of the two most valuable companies in the world: Pixar & Disney!
Jobs is the final wizard of the story and the mascot for:
“When the going gets tough, the vision rise to the occasion.”
"A good business model is like a good recipe — it combines the right ingredients in the right proportions to create something that is greater than the sum of its parts.”
Pixar has so many phases with distinctive business models to operate under a common vision…
But you might wonder, what made Pixar so brilliant at their craft?
Unveiling the Magic Behind The Pendant of Picasso:
THE BUSINESS MODEL OF PIXAR.
A business modelis the foundation on which a company is built.
Like a well-constructed building, a strong business model is essential for supporting and growing a business.
Pixar is a leading animation studio known for its innovative and successful business model.
Pixar is a trailblazing animation studio that has captivated audiences around the world with its stunning and emotionally resonant films.
The company's success is the result of a unique and innovative business model that combines a focus on storytelling and innovation with a commitment to collaboration and diversity.
“At the heart of Pixar's business model is its commitment to producing high-quality animated films that are both visually stunning and emotionally engaging.”
Pixar has always been at the forefront of computer animation technology, and it continues to invest heavily in research and development in order to maintain its position as a leader in the field.
This dedication to innovation has allowed Pixar to create some of the most beautifully rendered and thought-provoking animated films of all time, including classics like:
and Inside Out.
Pixar's business model is also based on the belief that great storytelling is the key to success.
Pixar has assembled a team of talented writers and directors who are responsible for creating the compelling and engaging stories that have made Pixar's films so famous.
Along with this, their constant upgradation towards beautiful production led to a goliath revenue of $4 Billion Dollars with only 4 films, all of this decision over a lunch which happened between Andrew Stanton, John Lasseter, Pete Docter, the late Joe Ranft.
“…So at that lunch, we knocked around a bunch of ideas that eventually became A Bug’s Life, Monsters Inc., and Finding Nemo. The last one we talked about that day was the story of a robot name Wall-E.”
Pixar's films are not only entertaining but also intriguing and meaningful. These stories touch on important themes and ideas that resonate with audiences of all ages.
Another important aspect of Pixar's business model is its dedication to collaboration and diversity.
The company actively seeks partnerships with other studios and filmmakers to bring a wide variety of stories to the big screen.
This approach has allowed Pixar to expand its reach and appeal and has contributed to the success of its films both critically and commercially.
In conclusion, Pixar's business model is a unique and innovative approach that has been highly successful in the competitive world of animation.
Their focus on storytelling, innovation, and collaboration has allowed them to produce some of the most beloved and successful animated films of all time and has helped to inspire a new generation of filmmakers and animators.
ACE THE SPACE
Pixar’s triumphed in the market which is filled with top-notch competition.
Surviving in the sea of creative establishments, your USP has to be somewhat rare from the rest.
Pixar's competitive advantage too lies in its affirmation to innovation, storytelling, and collaboration.
A competitive advantageis like a secret weapon that a company has in its arsenal. It is something that sets the company apart from its competitors and gives it an edge in the market.
Whether it is a unique product or service, a superior business model, or a dedicated team, a competitive advantage can help a company to achieve success and stand out from the crowd.
THE COMPETITIVE ADVANTAGE OF PIXAR.
Pixar's competitive advantage is rooted in its unwavering resolve to quality and innovation.
The company has always been the promoter of incremental technology innovation, and it continues to push the boundaries of what is possible in the world of animation.
Through its use of cutting-edge technology and its focus on storytelling, Pixar has been able to craft stories that are not only entertaining but also sentimental and aesthetically pleasing.
These films have captivated audiences all over the world, and have helped to establish Pixar as a leader in the world of animation.
In addition to its focus on innovation, Pixar's competitive advantage is also based on its undertaking to storytelling.
To sum up, Pixar's competitive advantage lies in its ability to consistently produce groundbreaking, imaginative, and emotionally resonant animated films.
This unique and unparalleled approach has allowed Pixar to stand out in the highly competitive world of animation and will continue to drive its success for years to come.
To the modern eye, the early tricks seem simple.
But if you’re building a pinnacle of animation, you need to at a juxtaposition of innovation, storytelling, and integration.
Pixar has pioneered in all of that stages.
But still, a fundamental question lingers while understanding the true essence of a business…
WHAT MAKES PIXAR TICK?
What sets the company apart and has allowed it to become one of the most successful and beloved animation studios in the world?
One key element that makes Pixar tick is its bond to longevity. That’s achieved through disruptive innovation from time to time.
The dedication of the company to advancing the capabilities of computer animation has enabled the creation of some of the most visually stunning animated films.
This fidelity to innovation and technology has allowed Pixar to consistently set new standards in the field, and to create films that are not only entertaining but also artistically impressive.
Pixar is well-positioned to continue to create films that are beautiful and touch people’s hearts!
Pixar's ability to expand its reach and appeal can be attributed to its adherence to Integration.
The vision of Pixar is to engage and attract a diverse audience, which has played a significant role in the critical and commercial success of its films.
This aim to broaden the reach and appeal of its content has helped Pixar to establish itself as a leader in the world of animation and to create some of the most beloved and enduring films of all time.
By consistently exploring new ideas and techniques, and by consistently challenging the conventions of storytelling, Pixar has positioned itself to continue to enthral and motivate audiences in the future.
As long as Pixar continues to push the boundaries of what is possible, it will remain a leader in the world of animation and a source of inspiration for everyone.
By remaining faithful to its principles of innovation, storytelling, and collaboration, Pixar has tickled with new age dreamers.
This devotion has allowed the company to continue to be a driving force in the world of animation, and will help to ensure that it remains at the forefront of the field for years to come.
Through its groundbreaking work, Pixar has set new standards for what is possible in animation, and has shown that stories that are beautiful, emotional, and stimulation can be a powerful and enduring force.
If you loved our inKorporation (a Business Breakdown segment), then DM us your reading experience @iKyu_HQ on Twitter & Instagram for more documentary-style breakdowns!
Product price is the amount of money that a customer must pay in order to purchase a product. This price can be determined by a variety of factors, including the cost of production, the demand for the product, and the competition in the market.
Funding is the act of providing financial support to a project or venture in order to help it succeed. This can take the form of investments, loans, grants, or other forms of financing, and is often essential for businesses, organizations, and individuals to achieve their goals and realize their potential.
Scaling (In the context of startups) refers to the process of growing a business quickly and efficiently. This can involve expanding the customer base, increasing production, or entering new markets. Scaling a startup can be challenging, as it requires the business to adapt to new conditions and challenges while maintaining its core values and vision.
B2B (business-to-business) funnel is a marketing and sales framework that outlines the different stages that a potential customer goes through before making a purchase. This funnel typically includes stages such as awareness, consideration, and decision, and is designed to help businesses understand the customer's journey and tailor their marketing and sales efforts accordingly.
Cash burning refers to the process of spending money faster than it is being generated. This can happen for a variety of reasons, such as investing in high-risk projects, pursuing aggressive growth strategies, or failing to control costs. Cash burning can be a concern for businesses, as it can lead to a depletion of cash reserves, which can be damaging to the company's financial health and stability.
Product market fit refers to the extent to which a product meets the needs and wants of a specific market. A product with a strong product market fit is one that is able to satisfy a significant demand in the market and is able to compete effectively against other products in the same category.
Operating costs are the expenses associated with the day-to-day operations of a business or organization. These costs can include things like salaries, rent, utilities, and materials, and are essential for the smooth running of a business.
IPO (initial public offering) is the process by which a privately-held company goes public and begins selling its shares on a stock exchange. This allows the company to raise capital from a wider pool of investors and can provide a number of benefits, such as increased visibility and liquidity for the company's shares.
Profitability is the state of being profitable, or capable of generating a profit. This is typically measured by the net income of a business or organization, which is the amount of money it earns from its operations after all expenses have been accounted for.
Business model is a framework that outlines how a company creates, delivers, and captures value. This model outlines the key components of a business, including its target customers, its value proposition, and its revenue streams.
Competitive Advantage refers to the unique advantage that a company or organization has over its competitors. This advantage can take many forms, such as a superior product, a more efficient production process, or a better understanding of customer needs.