THE PO TENTIAL FOR MUSIC
SUBSCRIP TION SERVICES
Let’s go for it. It’s a higher-risk strategy, but the rewards are gonna be much higher, and it’s where
our hearts are.’” Then he and CFO Lawrence Levy went to work learning everything they could
about the dynamics and economics of the animation business. If they were going to start making
cartoons, they were going to do it right.
Nobody wants to subscribe to
music. They’ve bought it for 50
years. They bought 45s, they
bought LPs, they bought 8-tracks,
they bought cassettes, they
bought CDs. Why now do they
want to start renting their music?
People like to buy it and they like
to do what they damn well please
with it when they buy it.
The rental model is a money-driven thing. Some finance
person looked at AOL getting paid
every month and said, ‘I’d sure
like to get some of that recurring
subscription revenue. Wouldn’t
that be nice?’ It’s certainly not a
user-driven thing. Nobody ever
went out and asked users, ‘Would
you like to keep paying us every
month for music that you thought
you already bought?’
THE PAYOFF OF A
In most businesses, the difference
between average and good is at
best 2 to 1, right? Like, if you go to
New York and you get the best cab
driver in the city, you might get
there 30% faster than with an
average taxicab driver. A 2 to 1
gain would be pretty big.
The difference between the
best worker on computer hardware and the average may be 2 to
1, if you’re lucky. With automobiles, maybe 2 to 1. But in software,
it’s at least 25 to 1. The difference
between the average programmer
and a great one is at least that.
The secret of my success is
that we have gone to exceptional
lengths to hire the best people in
the world. And when you’re in a
field where the dynamic range is
25 to 1, boy, does it pay off.
The shift at Pixar occurred at about the same time as the major turn in Jobs’s
personal life: the blossoming of his romance with Laurene Powell. In 1991, two years after she
met him following an informal lecture at Stanford University’s Graduate School of Business,
Laurene was his pregnant bride, married by a Buddhist monk at the Ahwahnee Hotel in Yosemite National Park.
Jobs had never seemed like the marrying type and hadn’t shown much of a sense of responsibility for Lisa, his first daughter, who was born out of wedlock in 1978. He denied paternity initially,
even though he had named an Apple computer after her. Egotistical, narcissistic, and manipulative
since childhood, Jobs often behaved like a spoiled brat who was accustomed to getting his way.
His personality didn’t change overnight after meeting Laurene, but his selfish ways did begin
to moderate, especially after his children, Reed, Erin, and Eve, came into the family in 1991, 1995,
and 1998, respectively. As is often the case with new parents, Jobs behaved as if he were the first
person in the world to discover and fully appreciate the joys of family life. He literally stayed closer
to home, converting a clapboard storefront building catty-corner from the Palo Alto Whole Foods
into a satellite office so his commute would be a short bike ride. (He didn’t use the office all that
much after returning to Apple.)
My bureau was a block up the street, and occasionally I’d see him out for a stroll, usually with
someone in tow. He always said he could think better when he walked. During these years, his
fame had subsided somewhat, so it wasn’t like encountering one of the Beatles at the supermarket. People pretty much left him alone.
I bumped into him on one of those walks when he was alone, and wound up joining him as he
shopped for a new bicycle for Laurene’s upcoming birthday. This was before you could do your home-
work on the Internet, but he had done his research, so there wasn’t much shopping involved. We were
in and out of Palo Alto Bicycles in 10 minutes. “I’d never have Andrea do something like this,” he said,
referring to his longtime administrative assistant. “I like buying presents for my family myself.”
Even after he went back to Apple, there was nothing Jobs liked more than spending time at
home. Not that he wasn’t a workaholic. We were iChat buddies for several years, so his name would
pop up whenever he was working at his computer at home. Almost invariably, he was in front of
his Mac until after midnight. We’d occasionally have a video chat, and if it took place early in the
evening, I’d often see one of his children in the background looking on.
In hindsight, Jobs’s having a real family might have been the best thing to happen to Pixar. He
was most effective as a marketer and a business leader when he could think of himself as the
primary customer. What would he want from a computer-animated movie, both for himself and
for his kids? That was the only market-research question he ever asked. He had always demanded
great production values and design for his computer products. He was just as picky about what
Pixar produced. Lasseter and Catmull couldn’t have asked for a more empathetic benefactor.
Shortly after his decision in 1990 to let Lasseter and Catmull start producing
commercials and short films, Jobs pulled a rabbit out of his hat: He negotiated a $26 million
marketing distribution deal with Disney that provided enough capital to make a full-length,
computer-animated motion picture. Because Disney had been a Pixar customer, licensing its
software for managing conventional animators, then–CEO Michael Eisner and his head of animation, Jeffrey Katzenberg, were fully aware that the company’s technology was solid and unique,
and that Lasseter showed flashes of genius as a new breed of animator.
Jobs was candid about the two Disney execs, telling me that both “make the mistake of not
appreciating technology. They just assume that they can throw money at things and fix them. They
don’t have a clue.” Once upon a time, he would have been enraged by the ignorance he perceived.
When I asked him what had soured an earlier partnership between IBM and NeXT, he ranted: “The
people at the top of IBM knew nothing about computers. Nothing. Nothing. The people at the top
of Disney,” on the other hand, “know a lot about what a really good film is and what is not.”
Even though he believed that Katzenberg and Eisner “had no clue” about how far Pixar could