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The Pixar question: what’s the point of your business?

Updated 20 December 2022

3min read

Nick Green
Financial Journalist

As Toy Story 4 passes $650m at the box office, we look back at the ugly duckling company that finally took flight – and see what lessons the Pixar story may hold for your business. Article by Nick Green.

What can Pixar teach your business?

‘How am I alive?’ wonders one of the new characters in the latest Toy Story film. It’s a moving one-line summary of the saga’s central themes: identity, purpose, and whether life has meaning. It’s also a question that could easily apply to the story’s creator, Pixar.

Today everyone knows Pixar’s name and what it means: the gold standard in animated feature films. Many of these movies’ fans would be astonished to learn that the company existed for more than 20 years before the first Toy Story was released in 1995. What on earth was Pixar doing all that time?

The simple answer is, movie visual effects (mostly). The more nuanced answer is, they were cutting their teeth and biding their time, waiting for their moment to arrive. The name Pixar comes from pixel, a single point – but it took Pixar a long time to discover their point.

Few household names can have had a rockier apprenticeship. In 1982 they worked with Industrial Light and Magic on films such as Star Trek: The Wrath of Khan, but the limited processing power of the time meant that their dream – the first fully computer-animated movie – remained hopelessly out of reach. While they waited for technology to catch up, Pixar became a hardware company, developing the Pixar Image Computer (which sold fewer than 300 units). As late as 1994 – a month before the release of the film that would make their name – majority shareholder Steve Jobs even considered selling Pixar to… Hallmark Cards.

Then everything changed. Were Pixar a visual effects team? A technology company? A computer manufacturer? No. Pixar told great stories. That was their point.

The business ‘identity crisis’

Pixar had learned one of the most important lessons in business: that it isn’t enough just to offer products or services and sell them. To earn their success, they had to discover their identity – the thing that made them unique.

It’s unusual for a business to take 20 years to find its true calling (or to survive that long without it), yet the problem itself isn’t rare. Steve Job’s other famous brand, Apple, faced even rougher waters. In 1996 (coincidentally just as Pixar was hitting paydirt) many believed that Apple would fold. It wasn’t until Jobs became CEO that the company’s emphasis moved from desktop computers to the more portable tech (iPods, iPads and iPhones) that now largely define the brand.

Another notorious case of an identity crisis is Twitter. Originally conceived as an SMS platform (hence the original 140 character limit), it rapidly evolved into micro-blogging, news, TV and advertising, but has always struggled with the basic question of actually making money. Twitter continues to hold the weird position of being one of the most influential voices on the planet, while floundering as a business model. It seems that neither the company nor its users are completely sure yet what it’s meant to be.

Working out your business’s identity

It’s not just the tech giants that face this issue. Every business needs to know its true identity. Consider a small newsagent and confectioner. What is the business? You could answer, ‘Selling newspapers, magazines and sweets at greater than wholesale price.’ But suppose you now learn that this shop is on the concourse of a train station. Suddenly its core purpose becomes clear: to provide travellers with the things they need to make their journeys more pleasant. It turns out the shop isn’t really in the news or sweets business – it’s in the travel business. And this knowledge gives the owner a clear direction as to how the business can develop and grow. Just as importantly, it enables the owner to avoid making choices that don’t fit in with that identity (e.g. by developing new lines of business that don’t especially benefit travellers).

Ultimately, your business isn’t the product or service you sell. Your business is the underlying vision: why this particular offering? Why these customers? And why us? This is where your business identity overlaps with your brand – indeed, it’s impossible to perfect your brand until you’ve answered those questions. Pick any famous brand that continues to part of a thriving business model, and you'll more than likely find a strong identity underpinning it.

Once you’ve found your identity, this should become the visible face of your business. Hardly anyone thinks of Pixar as a technology company anymore. Its actual stock-in-trade, vast computing power, is now essentially invisible to its customers. Cinema-goers simply enjoy the antics of Woody, Buzz and Forky and don’t even stop to wonder, ‘How are they alive?’

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.