Today, Pixar is a world-renowned brand whose animated movies we continue to watch and love. “Toy Story,” “Monsters, Inc.,” “Cars,” “WALL-E,” “Inside Out”—these are just a few of their masterpieces. However, 30 years ago, the company was on the brink of bankruptcy.

Until its IPO in 1995, Pixar was a deeply unprofitable company, into which Steve Jobs invested $50 million over nine years without any return. Pixar was engaged in four simultaneous activities: selling its own software, creating animated commercials on demand, producing short animated films, and preparing “Toy Story” for release. None of these activities were profitable at the time.

Pixar employed geniuses of modern animation, but the company seriously risked going bankrupt simply because their brilliant ideas did not align with market needs. Revenue from software sales was a maximum of $3 million a year. The commercials did not generate any profit. The short films were works of art, and Pixar even won an Oscar for one of them. However, their production was expensive and did not bring in any money.

Thus, the only avenue with the potential to make Pixar profitable was the production of feature-length animated films. However, the company faced a significant limitation—almost 90% of the potential profits from a film were taken by Disney, which invested its money in production.

The only way to save the company from bankruptcy was to split the film profits 50/50. But to do this, they needed to finance the films themselves. The only solution was to go public immediately after the release of “Toy Story” in theaters. The strategy was risky, but Pixar was lucky: the film grossed $373 million in theaters, and the IPO made Steve Jobs a billionaire.

Pixar survived because it eventually focused not only on the “brilliance” of its product but also on its profitability. Only after the company chose to concentrate on producing feature-length films did its fortunes gradually improve. The last 30 years have only confirmed the correctness of this strategic decision.

This is applicable to any business. Your company may have a great technological advantage, as Pixar did, but until you ground your ideas in the market, you are of no use to anyone. And until you make a strategic choice, you cannot become a strong and successful brand.