PIXAR = "To make pictures"
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Pixar Myth No. 2: Steve Jobs Co-Founded Pixar
No, he didn't. See the founding documents. Ed Catmull and Alvy Ray Smith were the Co-Founders of Pixar. They also took 38 founding employees with them from Lucasfilm in the spinout of Pixar. The spinout was capitalized by Steve Jobs, but it is not the practice in Silicon Valley to include the investors as founders [1], and Steve was not even close to being the first investor considered by the Co-Founders. Steve was a great, even spectacular, money man for Pixar, but the company was not his idea. See also Pixar Myth No. 5: Steve Jobs Ran Pixar for several examples of documents listing Ed and Alvy as the two co-founders.
First, Ed and Alvy met almost every venture capitalist in Silicon Valley.[2] Their deal was not a typical VC deal, so none of those firms agreed to capitalize the proposed company. Then they tried to find a strategic corporate partner. They approached (with the help of Lucasfilm management) several firms for partnership.[3] All but two of them faded away, after first interest. Ross Perot's EDS branch of General Motors teamed up with Philips of the Netherlands to strike a deal with them (and with Lucasfilm), for over $25 million. This deal almost succeeded after months of negotiations.[4] It fell apart when Ross Perot told the GM board they were a bunch of fools (for buying Hughes Tools). From that moment on, any deal that involved GM and EDS was impossible. That included Pixar funding. But the point is that Ross Perot was almost a potential funder of Pixar before Steve Jobs. (But neither he nor GM/EDS nor Philips would have been listed as co-founders of the new company.) Steve passed a low-ball number by Lucasfilm about the same time but it was substantially lower than the GM/EDS amount, so Lucasfilm blew him off.[5] After the failure of the GM/EDS and Philips deal, Ed and Alvy approached Steve and suggested he make his move then, as Lucasfilm was getting desperate and might listen to the lower number.[6] He did, and they did. So Steve became the VC, but definitely not a Co-Founder, of Pixar.
Among the founding employees, 38 of them in addition to Ed and Alvy (see the complete list at the founding documents), there was John Lasseter. Although fundamental to the success of Pixar, and a spectacularly talented artist, he was not a Co-Founder either. On the list of the founding employees is everybody in the computer graphics group at Lucasfilm, including the hardware and software engineers, the technicians, the secretaries, the receptionist, and John Lasseter. If John Lasseter is to be listed a co-founder then so must the other 37 persons in addition to Ed and Alvy.
Alvy notified Ed in a formal letter mailed 23 Aug 2004 that he was aware of and unhappy with the omission of his name as the other co-founder of Pixar, and with the complete omission of his name from the Pixar website. He termed it a lie. Ed's response was that it was just marketing and that he, Ed, was worried that he too wouldn't receive credit for Pixar. Alvy's rejoinder was to scoff at the notion that Ed would be left out. No action was taken by Pixar to correct the matter, nor has been as of 10 Feb. 2016.[7]
The first time that Steve Jobs was listed as "founder" was in the prospectus of the company issued at the time of its public offering, 29 Nov 1995, when the company was almost 10 years old.[8] Up until that time the co-founders were always listed as Ed and Alvy only.[9]
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[1] For example, a startup very familiar to Ed and Alvy was Silicon Graphics, founded by their friend and colleague at NYIT, Jim Clark. Jim cofounded SGI with at least eight others. The Mayfield Fund venture capital group capitalized the startup, but was not therefore considered a cofounder. Similarly, Sergey Brin and Larry Page cofounded Google. Andy Bechtolsheim, who gave them their first money, is not listed as cofounder of Google. Alvy's second company, Altamira Software Corp. was cofounded by himself and two others. The seed funding was by Autodesk Inc., but Autodesk was never listed as cofounder of the company. The notion is clear: although the money is there (has to be there) at the beginning, it's just the money, not the idea.
[2] A document titled "Potential Investors III," dated 21 June 1985, in Alvy's possession lists 36 venture capital and investment banking firms approached.
[3] A document titled "Potential Investors I," dated 21 June 1985, in Alvy's possession lists 10 corporations, or groups of corporations, that had stated interest at that date, including GM ("Head of CAD/CAM visited 6/20. Very positive.") and Philips ("Technical people from Holland will come next week.").
[4] A document titled "Agreement in Principle," dated 7 Nov. 1985, in Alvy's possession is a signed agreement between Lucasfilm, Pixar, Electronic Data Systems (GM/EDS), and North American Philips Corp. The investors would own 70% and the employees 30%. The investors would pay Lucasfilm $11.5m for the technology and the new company $14m for preferred stock, giving the new company a valuation of $20m. If the cost of the technology is figured into the cash invested, then the valuation was $36.43m.
[5] A document titled "Potential Investors Detail," dated 21 June 1985, in Alvy's possession is about Apple's status: "Steve Jobs wants one more social call to show off manufacturing. Then would like presentation. Marketing and sales may need to be downplayed for him. 3/22/85 Alvy and Ed had dinner with Steve. He will be away for two weeks. He wants to send John Skully [sic] over. 5/1/85 Steve's office said he will contact us." Steve was fired from Apple's board on 5/25/85, so nothing came of this sniff. He subsequently met with Ed, Alvy, and their financial person Ajit Gill, at his Woodside estate and proposed that he buy the group from Lucasfilm and run it. Alvy has in his possession a slide presentation dated 4 Aug 1985, apparently Steve's presentation, showing a proposed reporting structure of the company with Steve as head, Ed as head of Marketing and Sales, and Alvy as head of Research and Development. However, Ed and Alvy rejected the notion, saying they wanted to run the company, but welcomed his money. This was when he made the low-ball offer to Lucasfilm to fund the spinout in the form Ed and Alvy wanted.
[6] From the founding documents. The investor would own 70% and the employees 30%. The investor would pay Lucasfilm $5m for the technology and the new company $5m for preferred stock, giving the new company a valuation of $7.14m. If the cost of the technology is figured into the cash invested, then the valuation was $14.28m.
[7] A copy of the letter from Alvy to Ed is in Alvy's possession. It was written on Alvy's Ars Longa letterhead, dated 23 Aug 2004.
[8] The prospectus is in Alvy's possession, dated 27 Nov 1995, p. 47: "Mr. Jobs is the founder of Pixar." On the same page is "Dr. Catmull is a co-founder of Pixar." No others are listed, including John Lasseter. The prospectus also claims that Jobs was CEO from the founding on 3 Feb. 1986, which is not true. Catmull held that position most of the time, with Chuck Kolstad holding it briefly. See the founding documents.
[9] See the last image at founding documents. This is the Pixar management in a business plan of 12 Sep 1988. It lists Steve Jobs as Chairman of the Board and co-founder of Apple and NeXT. Ed is listed as President, CEO, director, and co-founder of Pixar. Alvy is listed as Executive Vice President, director, and co-founder of Pixar. Two other business plans in Alvy's possession are dated 29 Nov 1988 and 15 Feb 1989. Both list Steve Jobs as director of Pixar and co-founder of Apple and NeXT. Ed is listed as Chairman of the Board, CTO, and co-founder of Pixar. Charles (Chuck) Kolstad is listed as President and CEO, and director. Alvy is listed as Executive Vice President, director, and co-founder of Pixar.