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When we think of Pixar these days, we think of a studio that is a juggernaut, that has created a slew of beloved family movies including Cars, Toy Story, The Incredibles, Finding Nemo and many more. Lawrence Levy, the former CFO of Pixar, is currently out and about promoting his new book To Pixar and Beyond, and he recently revealed talked about how Pixar was not always the successful company that it is today. In fact, Pixar lost a ton of money at the beginning, blowing through $50 million before getting into the movies business. Here's what Levy had to say:
When I joined Pixar, it was 1994 and Pixar was pretty down and out. It was not an entertainment company. It was a graphics company that had burned through 50 million dollars of money and had nothing to show for it. It had no serious business prospects, and most people told me that was really a silly move to go into a company like that.
Start-ups often blow through a lot of money as they are getting off of the ground, but the interesting part of what Lawrence Levy had to say during The Opening Bell podcast is that most people didn't seem to think Pixar would ever pan out. Lawrence Levy clearly wasn't most people, and neither was Steve Jobs, as Levy also revealed that Steve Jobs was actually giving money to payroll at the time. He really wanted Pixar to be a successful graphics company and sell computers. As that direction didn't work, it's easier and easier to see how the company burnt through $50 million.
By the time Lawrence Levy got involved with Pixar, there was some progress being made on the movie-making front. The former CFO says that by the time he came around, the company had "pivoted" at least somewhat and the first few take on a Toy Story movie had been created. That was enough to sell Lawrence Levy:
There was a spark. I saw a couple of minutes of Toy Story. It wasn't finished. It was over a year before the film came out. I just looked at it and thought, 'Somewhere within Pixar, there is magic happening.'
Of course, it's easy to say in hindsight that you saw the company thriving before it actually happened, but what's nice about this comment is that Lawrence Levy doesn't try to embellish. He says he saw "a spark," and that was enough to want him to commit to the company. It ended up being a great decision, because once Pixar moved away from its graphics company roots, it stopped losing millions of dollars and instead started making major money. It also was able to go into a cool and creative direction with its movie business.