Sat, 11 July 2015
When we left the Steve Jobs story back on part three, Steve was at the lowest point of his life.
His big dream of creating the perfect computer Next was finished, and in an even crueler twist of fate, his other venture Pixar was in serious trouble too.
The lifeline that had been grabbed, when making the deal with Disney was slipping away from them.
Disney’s Katzenberg had seen what the company had created, and quite simply hated Woody, Buzz Lightyear and all the other characters which we now see as classics.
And together with the majority of Disney’s creative staff, he declared that the characters were unappealing jerks, the dialogues inappropriately cynical for a children’s movie (while he was the one who pushed for such characteristics early in development) and finished.
Pixar was back to making TV commercials just so it could survive — but it was obvious it would disappear if the work did not start again.
Steve had lost Apple, lost Next, and ploughed a huge amount of money into Pixar with no sign of a return from his investments.
But Woody and Buzz had other ideas. Its not often that you can say that someone's life was literally saved by some old toys, but this was going to be the case with Steve Jobs.
John Lasseter and other Pixar employees worked very hard at the script that Disney previously hated. They knew that they were in the last chance saloon, so round the clock developed improved character traits in the toys that worked to make them instant classics, and in February 1994, they turned out a new, improved version that won Jeffrey Katzenberg’s approval: production could resume.
Steve Jobs was not overwhelmed by this tiny success, and his desire to sell Pixar to outside investors never wavered. Even as late as the fall of 1994, Steve Jobs was actively pitching the company to anyone that he felt could help him regain his investment, even getting close to selling it to Apple's arch enemy Bill Gates.
Times were not good, but as many things turned out later for Steve, looking back and joining up his dots we can see clearly that it was a blessing that he failed to say goodby to the animation company.
In fact we could say that it was less of a blessing and more of an absolute saviour.
According to many people who with him at the time. The realisation that he had in fact tapped into something that was going to be far bigger than he or anyone could have realised came in New York central park in 1995.
There within the grass, trees, and open space of the big apples iconic recreational area, the movie studio had set up a gigantic tent with a movie screen showing previews of the two upcoming Disney films, Pocahontas, to be released in the summer, and Toy Story, for Thanksgiving 1995.
The watching audience in the tent loved what they were seeing, and watching their reaction more than the film Steve Jobs started to get back in action. The apathy that had seen him while away the hours with his daughter at home, was replaced by a vision of what might just be possible.
He realised, although it was true to say that he had kept his ideas firmly grasped to his chest, what he needed to do to get back on top and be seen as the earlier version of Steve Jobs once more.
The man who could do no wrong, with the midas touch to business.
But first he needed to see if the buzz around the two films could be translated into ticket sales.
Could the feeling of anticipation felt within the canvas tent be felt across the country, leading to seats being filled in cinemas across America and the world?
Well he didn't know, but he knew that he had things to do before he found out.
Steve Jobs started to get himself into position to maximize what could be achieved if the film was a hit. Getting more and more involved with the running of Pixars affairs, he made the bold move of removing Ed Catmull from his position as president and naming himself both president and CEO of Pixar
Not frightened by his previous recruitment fiascos, he also hired an outside CFO, Lawrence Levy, to give Pixar a respectable image to Wall Street. This would work wonders if he could force a move to take the company public. An idea that would have been laughed at just a few months earlier.
But now was a very different time, and PIXAR like a racehorse ready to explode from the gates and trounce the competition did just that.
When Toy Story finally came out on November 22, it wasn't just a hit, but it was a smash hit.
Audiences, across America flocked to see the Toy Buddy movie, and to say that Pixar and Disney were delighted was an understatement. It made $28 million in the Thanksgiving 3-day weekend alone, and eventually reached $160 million in US box-office receipts — an astonishing return for a production that cost just $27 million to get to market.
Steve Jobs had now got a successful company at the top of his resume once more.
And it is true in life, and certainly true in business, that success leads to success very quickly.
Most interested parties and investors only care about the recent track record, the hot streak that the incumbent could be seen travelling along at that moment.
Within a few weeks, Steve Jobs went from a tarnished ex-genius computer whizzkid, to seeing his face smiling confidently on the covers of business and industry magazines on every stand in America.
He was back, and in prime position, to create the largest and quickest influx of wealth he had ever experienced. Dwarfing the kind of financial figures he had enjoyed back in his highflying Apple days.
Back in the tent watching the movie pre-launch Steve Jobs had decided that he would take the company public. No one could see how this could have been possible with a failing company who hadn't made a profit in nine years, and instead had only see money go one way….the wrong way.
But Steve Jobs, felt strongly that he could ignore the naysayers, and meander his way through legal issues within the company that would stop this from occurring. He after all had a history of finding his way through the insurmountable difficulties that stop others in their tracks.
And this situation was no different.
He found the solution to the legal difficulties, and fair to say made more than a few enemies within the company in the process. His decision to focus the rewards on five individuals only, with himself taking the lion's share, alienated much of the company's loyal employees.
Most feeling that the company should recognise and reward their efforts to bring the film to a successful conclusion. Many threatened to leave upon hearing that new CFO Levy would find himself fantastically rewarded, when he had not done anything remotely significant in the short period he had been with PIXAR. This was a bitter pill to swallow.
But Steve Jobs didn't care a bit, and proved to the world that his vision was spot on, when on November 29th, one week after Toy Story was released, the company hit the stock exchange.
Such was the positive commentary about the film and the company, it was little surprise that the shares more than doubled from $22 to $49. It became the biggest IPO of the year. Steve Jobs had made it: he was now a billionaire, worth almost $1.5 billion.
He had made in one swoop ten times the money he had ever made at Apple in the early 1980s.
Steve Jobs was delighted, not just for himself, but he now had a company that had made $123 million, and wrote off all its debts in one go.
He was now in the driving seat once more.
And there is one thing certain about Steve Jobs, and that is his ability to gain momentum from a situation.
He went back to Disney, and instead of thanking them for their support, marketing and production experience, he re-negotiated the deal he had previously made.
Steve Jobs made it clear to them that unless a new contract was written, he would take his animation company to the other movie distributors once the three movie deal was concluded.
Disney could see what they had on their hands and agreed to every term Steve Jobs dicated.
The world was astonished.
They were not going to let the golden goose fly from their grasp.
Steve Jobs was on a roll and had a vision for himself that most certainly did not bear fruit.
To which we mean the company that he had started way back in the 70’s Apple was not on his radar at all.
He had moved on, and separated himself completely from his past. Reinventing himself within a totally new industry
However, we can also see that sometimes in a person's life there are things occurring behind the scenes that can pull them in a direction that they just couldn't have foreseen.
And within the walls of Apple, they had no direction, the company was in crisis and losing money hand over fist.
The Macintosh which still brought in the bulk of the companies profits was in steep decline.
The operating system that a couple of years previously had been seen to be state of the art and cutting edge was now cumbersome and inoperable.
The desires for faster and more sophisticated computers had seen their competitors namely Microsoft pull away to claim the lion share of the market and dominate the sales of home pcs
Apple was desperate to restore their product to its former glories, they worked around the clock to bring to market an operating system that would fit the bill.
Fast, cheap, efficient to build and able to cope with the demands of every consumer in the world at that time.
They struggled, and after delay upon delay realised, that they needed to pursue other avenues.
The word on the street was Apple were rotting from the inside out. They were unable to operate efficiently and sales were declining in such spectacular fashion that their days were numbered.
How could they quickly change the fortunes of the Macintosh?
How could they find the operating system that would bring the company back from the dead?
They needed to look to what the world was doing and seek collaboration.
They needed outside help if the company had any chance of survival.
And not even the board of Apple would have considered Steve Jobs to be the collaborator that they required, and certainly not even the most optimistic dreamer would have dared imagine that he not only be that person, but would also save the company in such astonishing fashion.
If you recall in the previous episode of the Steve jobs join up dots biographies. Steve had worked after leaving Apple on building the pinnacle of sophistication into the computer world with his Next computer company.
So perfect and advanced was the system that he built, that the world was quite simply not ready for it. It had been too advanced for the development costs to be able to be transferred to the buying public.
But that of course did not mean that the system was not still valuable to the world, and most importantly Apple computers.
Hearing about the company's problems, some NeXT employees made a very bold decision.
They would contact Apple and inform them that they had an answer to their problems on hand.
A system that was built, tested and now able to be built at a much cheaper cost than previously.
The world was ready for the vision of perfection that had cost Steve Jobs, his business and his reputation.
When Jobs heard that the phone call had been made, his jaw dropped.
He was stunned that the idea had occurred, and even more so that the idea had been placed in front of his own struggling former love..Apple.
In December 1996, Steve Jobs, for the first time in over a decade drove to the headquarters of Apple and stepped through its doors, and in his hand he held the future of Apple Computers. The very advanced NeXTSTEP, regarded as one of the best software platforms on the planet.
Steve Jobs said, envisioning the finally widespread use of NeXTSTEP, was a dream he had struggled ten years to realize but had always wished to occur. Justifying his efforts and perfectionism.
In short time he convinced the board that they should part with $400,000,000 for sole use of the NeXSTEP, with also 1.5 million Apple shares and the appointment as “informal adviser” to CEO Gil Amelio coming his way too.
Steve Jobs had remarkably, through a series of fortunate events involving a film company that he had tried to rid himself, and an operating system that nobody wanted, returned home.
No longer in the family garage, but this time at the re-birth of Apple.
It would not be long until he was no longer the informal advisor but instead be restored as the CEO of Apple.
We will see in the last episode of the Steve Jobs story how he placed himself in the midst of a company that had lost direction, lost market share, and lost the belief of the world, but through the experience and dots that were now connecting Steve Jobs would be see forever as the world's greatest CEO