- Location Really Does Matter For Entrepreneurs:
- Childhood Shapes Your Thinking:
- Go Get What You Want, If You Have The Courage:
- Education Is For Conformists:
- Assume That You Will Die Young:
- The Cream Soda Computer:
- Go To India:
- Pranking People Requires Creative Thinking:
- Starting A Company Is Very Difficult:
- Meet A Brilliant & Noble Engineer:
- Meetups Bring Insanely Great Ideas Together:
- Knowing What You Wanted To Do Earlier On Is Not Great For Entrepreneurs:
- Steve Jobs Excluded Relevant Information Where Necessary:
- Have Discipline Over Body & Mind:
- Picking A Name Is As Simple As Picking Apples:
- Crime Does Pay!!!???:
- Sharing Ideas Is Fine Up To A Point:
- Most Good Ideas Have To Be Forced Down People’s Throats:
- Run Your Company Out Of Your Parents House In Order To Appear Like a Real Company:
- Mike Markkula’s Marketing Theory Is Built Around Three Ideas:
- Don’t Worry About A Business Plan Until You Need Investment In A Serious Venture:
- Create A Simple Product For Households, Steve Jobs:
- Your Product Needs To Be A Full Simple Package:
- Jobs’ Management Style Was “Shit” from 1977 to 1985 Firing:
- A Startup Will Become Impersonal With Success:
- Apple III Was A Bastard Child Idea:
- Being Abandoned = Ignoring Reality & Discrediting That Reality:
- Good Artists Borrow, Great Artists Steal:
- Surround Yourself With “A Players”:
- Reality Distortion Field:
- Be At The Nexus of Humanities and Technology:
- The Believe In A Closed System & Product Control:
- Market Research Is For Idiots:
- Macintosh As The 3rd Industry Standard:
- Motivate With The Big Picture:
- Unhealthy Competition Within A Company Can Be Corrosive:
- The Best & Most Innovative Products Don’t Always Win:
- Eras Are Defined By Partnerships & Rivalry – Gates Versus Jobs Round 1:
- Genius Versus Shit-Head:
- The Boardroom Showdown & Emotionality:
- Advertising Does Matter:
- Frame Your Business Around War – Big Blue Versus Apple:
- A Messy Company Can Still Work:
- A Clean Factory Is Insanely Great But The Product Has To Sell:
- Being Right Isn’t As Important As Winning
- Imperfection Is A Moral Wrong:
- Bringing In An Outside Expert Can Be Costly:
- The Original Macintosh Had Bad Sales:
- Fall From Grace Through Management Incompetence:
- Being Vindictive Is Part Of Leadership:
- Rolling Stone PR Stunt:
- Finding Similarities Between Yourself & Your Business Partners May Not Be Good:
- Eras Are Defined By Partnerships & Rivalry – Gates Versus Jobs Round 2:
- Force An Ultimatum To Get Control Of A Company:
- Never Tell The Allies Of Your Opposition That You’re Planning A Coup:
- Targeting The Education Market Is Not Lucrative:
- How To Save A Dying Tech Company – Return To Your Successful Roots:
- Brilliant Failures Help You Grow:
- Design Should Not Trump Processing:
- Do Not Disrespect Your Potential Business Partners:
- Get Real On Your Lean Startup:
- Get A VC Who Missed Out On A Previous Winning Opportunity:
- Avoid The Problem Of Focusing On The Small Battles & Not Seeing The Big Picture:
- Gain Financial Control Against Your Business Partners:
- Art Reflects Reality
- Rivalry Of The Ants & Breaking With Disney:
- Build A Board That Cannot Operate Independently of the CEO:
- Do Not Chase Profits, Chase Value:
- Do Not Force Other Businesses Into Your Closed System:
- How To Save A Dying Tech Company – Fire The Board Or Resign:
- Merge Your Venture With A Giant That You Can Take Over:
- How To Save A Dying Tech Company – Make Products Not Profit, Fundamentally:
- Skate Where The Puck’s Going, Not Where It’s Been:
- The Loser Now Will Be Soon To Win:
- The Internet Is Made For Music:
- Brand Yourself Differently:
- Create Complimentary Product Offerings Without a Lead Loss Generator:
- Don’t Be Afraid To Cannibalize Yourself Because If You Don’t Others Will:
- Focus On What People Really Want…1,000 Songs:
- Steve Jobs Said that Google’s ‘Don’t Be Evil Mantra’ Is *Bullshit*:
- Get Yourself Into The Cloud & A Castle:
- Don’t Fear Changes In Industry & Anticipate Competitive Market Disruption:
- Create An Inventory Management System & Build Stores That Work:
- Converge Old Devices Into 1 New Device:
- Do Not Ignore Medical Diagnoses:
- Make Peace With Your Old Enemies:
- Follow Your Heart:
- Steve Jobs Was A Brilliant Jerk
You need to be in the right place at the right time. Being exposed to many ideas, variables, and potential inputs for accidental discoveries is better than living in a risk averse environment. In High School, Jobs took an electronics class which would have been less likely in most other cities in the US or Canada. Steve Jobs was fortunate to be raised in Silicon Valley, and because of that location it is less of a mystery as to why Jobs is who he was. Defense contracts in Silicon Valley during the 1950s shaped the history of the valley, military investment was used to build cameras to fly over the USSR, for example. Military companies were on the cutting edge, and made living in Silicon Valley interesting. In the 1930s, Dave Packard moved into Silicon Valley, and his garage was the core of the creation of Hewlett Packard. In the 1960s, HP had 9,000 employees, and it was where all engineers wanted to work. Jobs was ambitious enough at a young age to phone Dave Packard and ask for some parts. That’s how he got a summer job there. Moore’s Law emerged in Silicon Valley, Intel was able to develop the first micro processor. Financial backing was made easier to acquire where rich New Yorker’s retired to…By having the chip technology that could be cost measured for projections, Jobs and Gates would use this metric to revolutionize the technological world.
Jobs was never interested in cars, but he wanted to hang out with his dad, who emphasized the importance of building quality products, and loved souping up cars. The interior of a product is equally important as the exterior for Paul Jobs (Steve’s Father). Eichler Homes were great designs, with a simple capability that was common in Silicon Valley. Paul also taught that you should know more than the person you bargain with. Paul Jobs could not successfully get into real-estate because he was unwilling to sell, and be like-able. By his teens, Jobs realized he was smarter than his parents. Steve Jobs was willful, and his parents would go to great lengths to feed Jobs every whim by deferring to his needs. Steve Jobs got into a fight with his dad for smoking marijuana, but by his senior year, Jobs was looking into sleep deprivation, LSD, and other drugs.
Jobs was fascinated by the need for perfection in technology. Later on in the 1980s, he argued that even if you can’t see something, it should be done well. Jobs wanted to ensure that the Macintosh mother board was beautiful, so he had members of his team sign the circuit board. Steve Jobs became more interested in electronics than in car engineering, in particular the laser technology his father was working at Spectra Physics.
The 9100A was the first desktop computer, it was a huge computer that Jobs saw in the Explorers Club he participated in. Jobs created a frequency counter as part of the club, but he needed a special part so he phoned the home of the CEO of HP, and spoke with Hewlett directly over the phone for over 20 minutes. This conversation got Jobs a summer position at HP. Jobs had pushed his way into the factory. Steve Jobs hung out with the engineers mostly, but he worked in the electronic components section of HP.
Steve Jobs walked into the lobby of Atari in sandals, and demanded that he work as one of the first 50 people for Atari at $5 an hour. Jobs was very intelligent, and excited about technology. Nolan Bushnell used the power of his personality to build Atari, and Steve Jobs learned about this skill in part from Bushnell. Steve was a prickly person, and he had horrible body odor. Steve Jobs was brash, and, at Atari, told many of his co-workers that they were “dumb shits.” Atari didn’t mind his horrible BO because Jobs was agressive, smart, and worked hard. However, Jobs was put on the night-shift at Atari so that no-one had to deal with him during regular work hours.
Steve Jobs was not interested in memorizing information but being stimulated. He was sent home repeatedly. Jobs began to excel when he was incentivised by his game-changing teacher Imogen Hill “Teddy” who bribed Jobs into doing Math problems in exchange for lollipops. She further invested in Jobs with cameras and other toys. Steve Jobs was able to convince another kid to give him her Hawaii shirt for a school photo, he knew how to convince others to do things for him early on. Steve Jobs was put forward by one grade for his brilliance. He was not a straight-edged student however.
Assume That You Will Die Young:
Jobs believed that he was going to die young. He worked extremely hard because he was certain that he would be dead at an early age.
Wozniak was able to build a calculator that displayed binary code while drinking cream soda extensively in 1973. Wozniak’s great strength was that he was emotionally and socially inexperienced, was a high school geek who cared more about computers. Wozniak knew more electronics than Steve Jobs, and Jobs was more mature, so they met in the middle. Wozniak and Jobs both listened to Bob Dylan. Dylan’s words struck chords of creative thinking for Woz and Jobs. They bootlegged many Bob Dylan concerts. They even worked as entertainers in Silicon Valley dressing up as clowns to perform for kids.
Steve Jobs went to India to expand his meditation skills. Jobs sought spiritual calm but he could not get into his own inner calm in Silicon Valley. He spent 7 months in India being mentored in meditation. Jobs found a spiritual leader in Silicon Valley in Los Altos. Steve Jobs would do meditations, they learned how to tune out distractions. His friends noticed that Jobs became self-important. Steve Jobs also engaged in primal screaming which helped to resolve his childhood pain. Jobs appreciated intuitive spirituality, he wanted to grow in that way. You need to avoid getting stuck in thought patterns that are really just chemical patterns in your brain. By age 30, many people cannot escape their own grooves. You need to be able to throw yourselves out, according to Jobs. Artists go and hibernate somewhere. To be truly innovative over time, you need to think outside of the box, and escape yourself.
Steve Jobs and Wozniak produced a banner with a hug hand flipping the middle finger to all the seniors as the graduating classes marched past during a High School pep rally. This got Steve Jobs suspended. Steve Jobs was interested in pranking his classmates, and even put a small explosive under one of his teacher’s desk. Their most effective prank had been to scramble TV frequencies with a remote control. Wozniak and Jobs would hide in the bushes while university students were watching television.
On cue, the TV would be scrambled with a small device Woz had built, and one of the students would get up to fix it. Wozniak played around so that the student would be compelled to hold an awkward position in order to keep clear the TV signal. Wozniak’s device was highly effective in manipulating people.
If you’re not passionate about what you are doing, then you will give up. So in order to succeed you need to be passionate, and hardworking. It turns out that Woz and Jobs were not trying to build a company at first but were in fact trying to build a computer that they wanted. They had not gone to business school, and they didn’t even know what the Wall Street Journal was. They wanted to just go build a computer so that they and their friends could use it.
Jobs was fortunate to meet Steve Wozniak who believed in engineering as the highest, and most noble activity. ‘Woz’ did not believe in marketing, and did not aspire to be in the lime light. Their meeting was truly fortunate. Wozniak’s father taught his son how to build circuits at an early age. His father also taught ‘Woz’ to never lie, accept in the service of a good practical joke. Wozniak had an easier time making eye contact with a circuit than a girl, built a transistor to allow 6 kids to communicate with eachother, read about new computers in his spare time, and focused on designing circuits. Wozniak was socially shut out in high school. Wozniak worked on designing computers with half the number of chips the company had designed in his blue prints. Jobs had inferior tech-skills but had other advantages like charisma and persuasiveness.
The Homebrew Computer Club did not conform to the Hewlett Packard mold, or the hierarchical business structures of the UK, Japan or Germany. In Silicon Valley, USA, there were study groups who were building up computers for creative meetups. These were basically self-fulfillment movements in the California area of Silicon Valley where everyone was sharing ideas, and everybody was gaining from that exchange. For most people, computers were ominous, government machines that would destroy life values. By the mid-1970s, computing was no longer a bureaucratic control mechanism but rather a liberating one.
The Altair computer was available in 1975 from MITS, and Bill Gates started building BASIC which would become the first software product from his company Microsoft. Jobs and Wozniak bought the Altair as well in order to learn how it worked.
Borrowing ideas was the way that Wozniak developed the Apple I. He started to sketch out the idea of the Apple I from 1975 to 1976. Since the Intel 80 was so expensive, Wozniak bought a bunch of microchips that were not Intel compatible. This incompatibility would subsequently not allow Apple computers to work with other software products without some modifications. Wozniak built on the shoulders of previous processor chips, and he wrote the code by hand. When he had built the prototype, and the letters were displayed on the screen correctly, there was great excitement. It could not have happened in New York, London, or a small city in France. Innovation is geographically situated because you need to meet the right people, and be at the right place for this kind of success.
Steve Jobs wanted to go to Reed College because Stanford students already knew what they wanted to do. Reed College had a high dropout rate, and they tuned in, turned on, and dropped out. At Reed, Jobs did a lot of drugs, and he still swears by the importance of taking LSD. Steve Jobs refused to go to Reed classes that he was assigned, and focused on taking classes he was interested in, as well as breaking the rules. Steve Jobs decided that using his parents college funding which his parents had saved was unfair so, and he dropped out, but he didn’t want to leave Reed. Remarkably Reed allowed Steve to stay, and he audited classes. Steve Jobs learned about typography, and he found it fascinating. Jobs rejected the lack of idealistic vision in the 1980s, and he believed in the importance of the counter-culture movements of the 1970s.
Wozniak was at HP but would come by to play the new Atari games because Jobs was working at Atari. In the 1975, Bushnell asked Jobs to design a single player game which required that bricks fall towards the paddle when struck by the ball, instead of having a computer or a simple wall to compete with. The head of Atari knew that Jobs could not build such a computer programme but he knew that Jobs would likely enlist the help of Steve Wozniak. There was a bonus offered for every chip used below 50. Jobs told Wozniak that this project needed to be completed within 4 days, he then said that they would split the payment. Wozniak was so enthusiastic that he worked hard to get it done on time. The deadline was a false one as Jobs wanted to go apple picking that weekend.
In addition, Jobs did split the payment for the project but he failed to mention the bonus for the number of chips below 50. There were 45 chips so Jobs received 100% of the bonus that Wozniak did not know about. 10 years later on the history of Atari, it was revealed the Jobs was given a bonus and Wozniak was shocked. This program was the basis of the final product which was wildly successful as an arcade game. Wozniak states, “I’m not going to judge Steve’s morality. Apple wouldn’t be where it was without Jobs manipulative nature.”
Steve Jobs got into a disciplined fasting by eating just apples. He believed that minimalism led to great rewards when encountering complexity, and that experience is relative. Vegetarianism, acid, rock music, and the enlightenment campus seeking culture at Reed College was a laboratory for Steve Jobs’ development. Steve Jobs had extremely terrible BO in college because he did not believe in using any chemicals or deodorants. At Reed, Robert Freidland was able to mesmerize him. Jobs learnt from Freidland about charisma, and the art of persuasion. Friedland was a LSD drug dealer, and was sentenced to two years in prison in 1972. When he was released, Friedland ran for student president at Reed College. Freidland had met the Maharaji in India, and Jobs learned about how a state of enlightenment could be attained through practiced mediation. Steve Jobs had an ability to stare people deep into the eyes. Freidland taught Steve Jobs how to initiate the reality distortion field by bending the situation to his will. Freidland was dictatorial, and wanted to be the centre of attention, and a real salesman. Jobs said LSD helped him to understand the connection with human history, and the absence of the need for profit. Steve Jobs was hardly interested in presenting himself in a proper way throughout the early years of Apple Computer Inc.
Steve Jobs was on a fruitarian diet and he picked apples at the One Brand Farm which was a hippy commune. Apple Computer was a smart choice as a name because it was friendly, and simple. It was counter-culture, and nothing could be more American. Apples and Computers don’t go together so it got people thinking.
Crime Does Pay!!!???:
If you own an Apple product then you are complicit in supporting crime, kinda but not really… However, we forget that sometimes rules have to be broken in order to innovate. Read the following and see if you agree that we might never have heard of Apple Computers without an illegal gadget called The Blue Box…..
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Crime Does Pay? Paul Jobs (Steve’s adopted father) made extra money by souping up cars without telling the IRS, and this was duly noted by Steve. When it came to borrowing, Steve Jobs didn’t mind using his high school’s money to buy parts from a major company. After-all, to Steve, hus school had a lot of money. By 1971, Steve Wozniak had read in Esquire about hackers, and ‘phone-freakers’ who had invented a way to cheat phone companies. Woz read the article to Jobs over the phone from college. The so-called Blue Box was invented by a guy named Captain Crunch. It was interesting because the device mimicked the dial tones necessary to connect long-distance calls thereby allowing calls to be made for free. Jobs and Wozniak went to work reading the Bell System Technological Journal produced by AT&T in order to mimic Captain Crunch’s long-distance tones mimicking device. Of course, this was all illegal.
After much research and work, the two Steves created their Blue-Box device which allowed them to call the Pope, Australia, and elsewhere free of charge. Jobs always felt that stealing long-distance calls was fair when a company like Bell was involved. Although it was illegal, Jobs believed they could sell these devices, and they did manage to sell over 100 of them. Jobs did all the pitching of the Blue Box to random people in the Palo Alto area. It was their first real entrepreneurial endeavour. In an illegal market like telephone hacking, however, there were risks. In one encounter, Jobs and Wozniak were robbed of one of these devices by a crazed man who held Jobs and Woz up at gun-point. By doing something illegal, Steve Jobs and Wozniak gained confidence that they could put a product into production. The Blue Box gave them a taste of the combination of engineering and vision. The lesson is that it turns out that crime does pay when the work is the forerunner of something like Apple.
The Homebrew Computer Club (a collection of computer enthusiasts) believed that their ideas should be shared, exchanged, and disseminated. It was coordinated by people who believed that like-minded nerds should all share information for free. They believed that there should be no commerce at the Homebrew Computer Club. Wozniak supported that view, he wanted the Apple I to be shared for free with other people at the Homebrew meetings. Others disagreed. Bill Gates wrote a letter to the Homebrew Computer Club saying the opposite; that they should stop stealing the programming that he and his partners had created.
The letter argued “Who can afford to do their professional work if everyone is stealing it?” Steve Jobs agreed with Bill Gates about sharing ideas. Jobs convinced Wozniak to follow a closed approach, and to sell computers rather than sharing them. Jobs asked that Woz stop sharing the schematics information regarding the Apple I with others, for that reason. Jobs decided to sell these computers by buying 50 panels for circuitry. The closed system had major benefits in his later career. Starting in 1999, Apple created iMovie, FinalCut Pro, iDvd, iPhoto, GarageBand, (most importantly) iTunes, and the iTunes Store. The personal computer was morphing into a lifestyle hub, and only Apple was positioned to create a full (CLOSED) experience where the product was simple, and enjoyable. Therefore, sharing is great up to a certain point.
Wozniak did not want to go into business, but Jobs convinced Woz to join Apple. But first, Wozniak decided that he would do the ethical thing by telling Hewlett Packard about his Apple I product which he had constructed based on his experience and training at HP. Wozniak presented the Apple I to executives at HP, but they did not think a personal computer made any sense. During one Homebrew Computer Club gathering, Jobs showed the Apple I and after his presentation he asked how much people would pay for the Apple I. The room was silent, no one was interested in buying the Apple I. That is, no one but Paul Terrell who owned an electronics store called The Byte Shop. Even Atari was pitched by Jobs, but they thought Jobs was a clown.
Apple’s first order was for a total of 50 computers from Terrell for $500 each. It took until 1981 for IBM which had dominated the mainframe computers industry to enter the personal computer market while Apple dominated as the fastest growing company in the history of the world at that time, and had already been in the process of developing both Lisa, and the Macintosh.
Another example is that Xerox PARC researchers had invented the Graphical User Interface (GUI) which was visual point and click system that would replace the black screen coding required to operate a computer previously. The only problem is that the Xerox management did not want to explore this personal computer technology. The management at Xerox did not understand the vision of these researchers at Xerox PARC and could not see a P&L statement that justified the time and energy to make the leap from photo-copying to personal computers. Steve Jobs would later explain that the Xerox management were “copy-heads.”
Adele Goldberg showed Jobs the Xerox GUI, but she was angry that Xerox was allowing Jobs to see ‘everything.’ She understood that Xerox had “grabbed defeat from the jaws of success” according to Jobs, by giving him access to their R&D work in exchange for shares in Apple. Without Jobs’ visit to Xerox PARC, the Macintosh, and Lisa would not have had the GUI, and Bill Gates might not have subsequently revolutionized computers with Windows.
In order to fulfill their first order from Mr. Terrell’s electronics store, Jobs ran Apple out of his parents house. This was complicated by the fact that Jobs’ father would frequently insist that he rightfully watch the end of Sunday football instead of letting Steve program computer chips on the family tv screen. Things were awkward; they even had a company phone number which was diverting calls to Steve’s mother who acted as secretary…
A curious brand marker has been the much vaunted Apple logo. Interestingly, the original logo of Apple was a ridiculous picture of Newton and a quote from Wordsworth (as seen on the left side of your screen). For the Terrell batch, Jobs and Wozniak marked up the price of the computer from production to $666.66 for every Apple I sold. Steve Jobs claimed that he was a private consultant at Atari in order to improve his start-up’s credibility. The original Apple I was displayed at a computer fair. Wozniak was the best circuit engineer, but the Sal 20 was better looking. Apple I looked like it was not created by serious people. That is when Jobs realized he needed to build a fully packaged computer, and he was no longer aiming for hobbyists but for the people who wanted to use a computer which would be ready to run out of the box.
Jobs and Wozniak agreed to start their own computer company with $3,000. Wozniak was excited to start a company with Steve Jobs. Apple started with $1,300 of working capital. Wozniak wanted to use his Apple work at HP, but Jobs insisted that the work should be controlled within Apple, and not given to HP. Steve Jobs’ idea was to have control over the computer, and Jobs created tools so that no one but Apple employees could open their computers. Wozniak refused to leave HP, and Jobs forced Wozniak to give up HP by calling Woz’s family and friends. Jobs actively cried a lot over the phone to Woz’s family in order to convince Wozniak to quit his day job. The only way to get Wozniak onboard was if he could stay at the bottom of the organizational chart at Apple from 1977 onwards. That was not a problem for Jobs.
First, you need to connect with your customers, and understand their needs and aspirations. You need to understand their needs better than any other company. Second, you need to focus, and eliminate any activities that do not help to achieve your goal. Third, is to impute. You need to make sure that your brand is respected, because people form their opinion of you based on the signals that you convey. You might have the best product but if you present them in a slip-shot manner you will not get what you want. Steve Jobs would always impute the desires of his customers. He cares about the packaging, and cared about setting the tone for how customers perceived the product.
MacKenna’s Advertising Style Worked: The Apple logo was developed as a multi-colour symbol. The brochure read “Simplicity Is the Ultimate Sophistication.” Apple’s display area in computer fairs was always very impressive. There were only 3 Apple IIs that were finished for the computer fair in 1977, but they stacked up Apple II boxes to suggest they had more. Steve Jobs and Wozniak were forced to dress up, and they were trained on how to act by Markkula.
Mike Markkula entered Apple because Jobs needed money to get the Apple II built. They needed to build inventory, and they needed to develop a marketing strategy, and distribution in order to build a business plan. Markkula worked in computer chips, and was excellent at finance, and price measures, Markkula was very successful already. When Markkula showed up he had a convertible. He wrote a business plan that centred on guesstimates of how many people would own a computer in their home. Markkula wanted Apple to balance check books, and keep receipts. The spirit of Markkula’s prediction was true.
Markkula co-signed a bank loan of $250,000. They owned 25% of the stock, and Apple was incorporated on April 1, 1976. He believed that Apple was at a start of an industry. Apple Computer was growing at an incredibly fast rate. The numbers were mind-blowing: from 2,500 Apple IIs sold in 1977, 8,000 were sold in 1978, and up to 35,000 in 1979. Remember there was no market for personal computers before! The company earned $47 million in revenues in fiscal year 1979, making Steve Jobs a millionaire on paper (he owned $7 million worth of private stock). Markkula believed that Apple would go public within 2 years, it went public on December 12, 1980 at $10 per share making over 300 people millionaires. Several VCs cashed out reaping billions in long-term capital gains. Through Markkula, Jobs learnt about marketing and sales. Importantly, Markkula did not want to start a company just to get rich.
Macintosh was built around the idea that people should own their computers and computers should be for the masses. Rather than having to travel to a library or computer centre to use them, computers should be available within the home. It should be pitched as a kitchen appliance and an accounting tool. Few companies thought the computer would have mass appeal but Apple had developed the market and then began losing ground to IBM. Enter Jef Raskin, a professor, academic, and computer specialists who set up what he called the “Macintosh” office off of the main HQ of Apple Computer, Inc. Engineering brilliance was needed but Raskin was too willing to make compromises on the price point at $1,000. Raskin believed in starting with the ambitions of the immediate technology and not with Jobs’ goal of creating an insanely great machine. Raskin did not believe that they could distort reality. In fact, Jobs was moved out of the Lisa project in 1980 for his absurdities with regard to what could and couldn’t be done through the badgering of his subordinates.
Jobs went in to pitch Atari for support for Apple II which had colour, a power source, and keyboards. It was rejected partly because Jobs went to the meeting without shoes. Another company, building the Commodore decided that it would be cheaper to build their own machine. The Commodore Pet came out 9 months later which sucked according to Jobs. Jobs was willing to sell to Commodore but Wozniak felt that this was a bad move. They designed a simple case for the Apple II which would set Apple apart from other machines. The VisiCalc also allowed Apple II to breakinto in the Financial market. Jobs wanted light molded plastic, and offered a consultant $1,500 to produce the design. The Apple II had the advantage of not requiring a fan, or multiple jacks. Jobs wanted a closed system, a computer that was difficult to pry open. Conversely, Wozniak wanted to give hackers the chance to plug in, but Jobs did not want that option.
Steve Jobs endorsed the view that less is more, and that God is in the details. Jobs embraced the Bauhaus style which rejected Sony’s approach of gun metal or black. The alternative was to create hi-tech products by packaging the products in beautiful, white, and simple casing. Apple customers understand the value of presenting their products out of the packaging. You design a ritual of unpacking a product. Jobs also felt that intuitive ideas need to be connected in computers
Steve Jobs loved to tell people that their work was shit, and would force his co-workers to pull all-nighters to finish applications. When Apple started to get going in 1978 – 1979, he would come into the office, and tell Wozniak’s engineering team that they were all shit. This further distanced the two as Wozniak felt that Jobs was abusive, and had changed. Jobs would cry easily, and he would put his feet in the toilet bowl in the middle of the day to wash them. For more stability, Michael Scott was brought into Apple Computer Inc as the president, Scott was fat, had ticks, and was highly wound.
Scott was argumentative, and Jobs clashed with him. Jobs produced conflict, and he was only 22 years old, but Apple was Jobs’ company, he did not want to relinquish control. Steve Jobs and Michael Scott fought about employee numbers. Steve Jobs wanted to be employee number 1, and Wozniak would be number 2. So Scott made Jobs’ badge number O but in reality Jobs’ pay role remained number 2. Scott was a pragmatist while Jobs was not. Steve Jobs started crying over a one year warrantee for the Apple II. At age 26, he had a successful company and the Apple II. In 1981, Jobs was kicked off the Lisa project and took over Macintosh so that he could make a contribution comparable to Wozniak.
- a) Jobs missed most appointments;
- b) Jobs acted without thinking and with bad judgment;
- c) Jobs attacked any suggestion without thinking, claimed it is stupid and a waste of time only to turn around, if the idea was good, and propose the same idea as his own a week later;
- d) Jobs would never give credit where it was due;
- and e) Jobs would cry when conflicts erupted in board room meeting.
Michael Scott was fired as he became more and more erratic giving Jobs more power. In retrospect, the New York Times wrote: “by the early 80’s, Mr. Jobs was widely hated at Apple. Senior management had to endure his temper tantrums. He created resentment among employees by turning some into stars and insulting others, often reducing them to tears. Mr. Jobs himself would frequently cry after fights with fellow executives.”
Wozniak wanted Apple to be a family while Jobs wanted the company to grow quickly. Jobs felt that Wozniak had failed him because Woz appeared to be unfocused, and failed to get a ‘floating point’ BASIC finished for Apple II. The Apple II launched the personal computer industry. Wozniak had created the machine, and Jobs designed the exterior which was marketed more effectively. Steve Jobs wanted to spur a great advance in computers. This meant that the company had to hire more and more people, and Jobs became increasingly disrespectful towards slackers, and B Players within Apple. The point is you can’t really have a family environment in a startup that scales. And you need to scale in most competitive industries because the big players will try to destroy you at every turn. If you want to have a family like atmosphere then good luck you but expect to fail.
Apple created a failed project, and it was not marketed well. The design that Jobs insisted on was not manageable for the circuits, and the Apple team all collectively made their contributions to the device so it was a gigantic mess. Steve Jobs insisted that there be no fan in the computer, as a result, the design did not allow the computer to cool properly, and it frequently overheated, the only way to prevent the chips from disconnecting with the mother board was to drop the computer onto the desk which customers were instructed to do whenever they phoned Apple; “Okay, just pick the computer up and drop it on the desk, that should knock the chips back into place.” The IBM PC crushed Apple III in sales. It was a disaster.
Steve Jobs had an illegitimate daughter that he didn’t bother to recognize as his at first. How’d that happen? In the mid-1970s, Jobs lived in a four bedroom house, and rented the place out to strippers. Chris-Ann Brennan lived with Jobs in separate rooms, apparently they lived as weirdos, and did acid. When Chris-Ann became pregnant with Steve’s child, he became disconnected from the situation, and did not deal with the pregnancy. He could be engaged and disengaged in minutes. Chris-Ann Brennan and Jobs had sex, but instead of taking responsibility, he engaged in character assassination against Brennan, and tried to prevent a paternity test in order to avoid dealing with the possibility of bringing a child into the world. He did not want to take responsibility, and he decided to believe in his own lies, according to Isaacson. Steve and Chris-Ann were 23 when they had their child, which was the same age as Jindal (Steve’s biological father) when he had Jobs. Jobs did not try to help Chris-Ann, and instead would ridicule her.
Walter Isaacson speculates that being abandoned by his biological parents led to this heartless/irrational behaviour, but it’s not entirely convincing and clear. Another classic example of ignoring reality would be when Jobs was diagnosed with cancer, but waited 9 months before pursuing surgery. Ignoring reality is how Jobs got through tough times.
Robert Friedland helped Chris-Ann Brennan have her baby girl but Steve Jobs helped name the child, and Jobs insisted in the name Lisa Nicole Brennan. Finally, a year later, Jobs agreed to get a paternity tests where he was found 94.1% likely to be the father, and a Californian court forced Jobs to pay a monthly child support bill of $385. Despite the test, he claimed at Apple that there was a large probability that he wasn’t the father. He did this by using statistics improperly. Jobs claimed that 28% of the male population of the US could have been the father. When Chris-Ann heard what he said, she interpreted it as if Jobs was claiming that she had slept with 28% of the US male population.
‘The best way to predict the future is to invent it’ was one of Steve Jobs’ favourite sayings. Jobs was granted access to Xerox PARC which was established in the 1970s as an R&D digital spawning ground in Silicon Valley for Xerox. One of its products was the Xerox Alto which was a new computer interface that went beyond the BASIC systems like MS-DOS (ie. black screen + code commands), and in the process created a desktop that was called the Graphical User Interface (GUI) ie. everything on the screen was visually represented by icons. Meanwhile at Apple, Jef Raskin brought Bill Atkinson on board in the Macintosh division to develop a cheaper version of LISA but of course, Jobs wanted to get on the front of the wave, and “make a dent in the universe”. Jobs began to exert more influence on the Macintosh project which was Jef Raskin’s brainchild. Jobs hated Raskin because he was a professor/abstract thinker, and Raskin was obviously in control of the Macintosh project which Jobs saw as his own way forward.
In 1981, Jobs gave 100,000 Apples shares at $10 per share to Xerox in exchange for access to their Xerox PARC. When Steve Jobs saw the demo of GUI he was amazed that Xerox had not commercialized these innovations: 1) the networking, 2) object oriented programming, 3) the mouse and GUI. With this one visit, Steve Jobs had found the way to connect users to the future with GUI, and a way to leapfrog over Raskin’s plans for Macintosh. Steve Jobs was proud of his stealing the great ideas from Xerox. What transpired was less a heist by Apple but a fumble by Xerox. Xerox was too focused on photocopies, and selling more machines. Ideas are important but execution and positioning is also crucial. Microsoft would subsequently ‘steal’ the GUI concept from Apple, but in reality, Bill Gates had also visited Xerox PARC.
In the early 1980s, Jobs recruited people by dramatically unvailing the MacIntosh, and seeing how interviewees responded to the designs. He even unplugged an engineers computer named Andy Hurtsfeld (while he was coding), and forced him over to Macintosh from the Apple II team because Jobs recognized Hurtsfeld’s A Player status. You need to build your company with a collaborative hiring process where a candidate tours around the company meeting everyone that is relevant for hiring that candidate. Why? Because Jobs may not have always had A player ideas. For example, he wanted to call the MacIntosh the ‘bicyle’ because like an actual bike, the MacIntosh would help the human achieve objectives that were not possible on their own. The idea of the Apple Bicycle was shot down by wiser marketing minds. A Players hold you in check.
When Wozniak crashed his airplane in February 1981, he left Apple Computer. After the launch of MacIntosh in 1984, Scully merged the MacIntosh and Lisa teams with Jobs as their head. Jobs told the Lisa team that he was firing 25% of their team because they were B and C players. The management of the MacIntosh team would all gain top positions in the amalgamation. It was unfair, but Jobs latched on to a key management experience, that you had to be ruthless to produce an A Player lineup.
For Jobs, if you hire a B player you will cause of Bozo explosion. B players always want to hire people who are inferior to them. C players hire D players. So keep the best people in your team, and make sure that you keep the right people in your organisation. He believed that if you let any B players into your organization, they would attract other B players as well. A players love to work with other A players, by definition, they want to grow and be the best. That is what makes A Players valuable.
This reality distortion field was empowering. Bud Tribble in the early 1980s said that “Steve has a reality distortion field. In his presence, reality is malleable. He can convince anyone of practically anything. […] The reality distortion field was a confounding melange of a charismatic rhetorical style, an indomitable will, and an eagerness to bend any fact to fit the purpose at hand.” It was self-fulfilling, you do the impossible because you would believe it. Jobs could deceive even himself which allowed him to con other people. Jobs used this tactic which helps to make irrational goals real. The rules didn’t apply to him. He was a liar, and the Reality Distortion Field is a creative way of saying that he was a liar. As a child, Jobs had been rebellious, and this plays into his special, abandoned, unique self. If you trust Jobs, he will make it happen.
That is the great part about the reality distortion field. If you pretend to be completely in control, people will believe you are, and will be empowered. Jobs was so passionate about Apple and NExT devices, and his force of personality allowed him to change peoples minds as a salesman. Steve Jobs was able to change reality by using charismatic rhetoric, and bend facts. The reality distortion field was never acutely apparent. Jobs was lying quite a lot during team meetings.
As a result, it was difficult to have a realistic deadline since bending facts has its downsides (Think wasteful factory decorations, missing product dates at NExT etc). Jobs did not like manuals, and told Gates in 1984 that they should not have any manuals, but Gates did not bother mentioning that they had an entire team working on manuals for Mac. Bill Gates was completely immune to Steve Jobs’ reality distortion field. When reality hit, Jobs had a difficult time dealing with it.
Connecting arts with technology is powerful. Jobs practiced Buddhism & mediation. Simplicity is important for a company. And it is evident that Buddhism was instrumental in Jobs’ development of Apple. Keeping it simple is essential to producing a user-friendly product that even the parents of baby-boomers can use. In his senior year, Jobs loved King Lear, Plato, and Dylan Thomas. Steve Jobs took AP English in high school. Jobs worked in electronics, and learnt about literature. Jobs took an electronics class at high school with McCaulum.
At Reed, Jobs audited a typography class which Jobs later argued was responsible for the Mac having typeface or proportionately spaced fonts. Steve Jobs understood that creative people are disciplined but technology people think they are lazy, while technology people do not know how to communicate intuitively to people, and have created a secret language to exclude ordinary people. Steve Jobs bridges that gap beauty through his life’s work. Producing something artistic takes real discipline.
The architectural structure and software had to be tightly linked according to Jobs. Functionality would be sacrificed if one were to allow for multiple software producers. While Microsoft could be used on any hardware, Jobs refused to have Apple computers fragmented by the work of partners who did not follow Apple’s rules. On the customer level, Jobs refused to allow users to alter the product, pitching the idea that Apple products were more user friendly (which they were). He did not want to give users control. The closed system is useful for the iPhone era but not from 1981 until the mid to late 1990s with IBM (Big Blue) and Microsoft working across platforms; Apple’s competitive advantage in the PC market eroded dramatically in the early to mid 1980s. By scaling with multiple hardware platforms such as IBM PCs, Dell, and Compaq, software developers had an open-source alternative to the closed Apple system. Bill Gates realised this closed system problem in the early 80s and exploited it. Jobs wanted end-to-end control so that software developers had to buy into the Apple system, however, critical mass was essential for that to work. In 1982, Jobs wanted the industry standard to be Apple software + hardware, he did not want sales cannibalization that comes with allowing other computers to use the Apple Operating System on their computers. But for developers, the labour required to work within Apple’s ecosystem was prohibitive compared to the gains made by working on an open-source PC world. As a result, in 1997, Jobs admitted that they had been overly proprietary, and thus failed to see how that was hurting their marketability from 1984-1997. In the 2000s, the closed system had the advantage as Apple become a premium/closed brand through carefully working with 3rd parties.
For Steve Jobs, Apple was about producing what people did not know they wanted yet. To be innovative, meant producing what he believed was needed. He was not interested in group testing his products. He once asked, “Did Alexander Graham Bell create a focus group before inventing the telephone?” Customers are going to try to get a better, cheaper computer. Focus groups do not tell you what the customers actually need. Customers do not know what they want.
Bill Gates’ Microsoft appeared in Hawaii for the software dating game. The Macintosh was the product that Bill Gates felt was revolutionary. The ideal relationship would be for Bill Gates to work exclusively with Apple but that was not Gates’ strategy. Gates wanted to be a competitor, and wrote software for the IBM. In 1982, 279,000 Apple II were sold compared to 240,00 IBM but in 1983 there were 420,000 Apple II versus 1.3 million IBMs and clones. IBM had taken 26% of the market, and IBM/Clones would take over half of the market which included other compatible PCs.
Steve Jobs was not interested in profiting more than competitors, but in producing a better, more beautiful computer. Macintosh’s team was burned out in conflict, and demoralized but Jobs had moments of brilliance. To counteract the negatives of Jobs’ management style, he would illicit the big picture. In one meeting, the issue was with regard to the booting time/start time for a new computer which was over a minute long. Jobs explained that if you combined 1 million people’s boot times, it would add up to many many cumulative hours of waste. In dramatic terms, Jobs argued that reducing the booting time by a few seconds could save about 50 lifetimes in total.
‘Making a dent in the universe’ was the overarching idea behind Apple. In 1981, IBM released their own personal computer, and Apple was confident about their market position. The problem was that IBM was a more powerful company, and had real strengths in the corporate establishment, and brand recognition. The Big Blue vision was to crush Apple, and IBM was the perfect foil for the spiritual struggle of Apple. Jobs felt that once IBM gains in a market sector, they almost always stop innovating. For Jobs, IBM was a force of evil, later the enemy was Microsoft and then Google subsequently.
Jef Raskin decided that Macintosh should use the Motorola processor which was more expensive, pushing the cost of the Macintosh upwards. Interestingly, Raskin did not like the point & click mouse. He did not like icons concept either, both of which Jobs was advocating for at Macintosh. Steve Jobs took over Macintosh in February 1981 by introducing politics, practical perspective, intensity, and bringing in Bill Atkinson into the team. Michael Scott (the CEO of Apple) gave Jobs control because it was not a serious part of Apple (Apple II was still the bread and butter product), and cleared Raskin out of the team abruptly. Jobs was energized by competition against the Lisa team within his own company. Macintosh was a computer platform that would ‘make a dent in the universe’, and help him leave the mark that Wozniak had already achieved with the Apple II.
Entrepreneurs do not always transition into effective managers. Steve Jobs had a pirate flag waving over his Macintosh office at Apple. The Lisa team was jealous of this renegade team, and stole their Macintosh pirate flag as a prank. The Macintosh members then found the secretary who was hiding the flag under her desk, and wrestled it from her. This bizarre corporate behaviour had a negative effect, it said that Jobs team was better than other ones, and it was divisive within the company.
Steve would not allow Apple II employees to visit the MacIntosh office. Jobs wanted people to know about Macintosh but he wanted everyone else at Apple to know that they sucked even though Apple II was generating the revenue for the company. Steve Jobs’ Macintosh team seemed to be trying to destroy Lisa because Jobs was kicked off the project.
The Lisa team did feel that the Macintosh was undercutting Lisa since people were going to wait until Macintosh was released before buying their next Apple product, as it was announced in 1983 that Macintosh was on the way. In the PR campaigns, Steve Jobs admitted that the Macintosh was better than Lisa, and within two years Lisa was too expensive, and would be obsolete. Within months of Lisa’s launch, Apple had to pin the companies hopes on Macintosh.
The Microsoft team members wanted to know everything about the OS operating system during their close partnership with Apple in 1983. Gates believed that GUI was the future, and he claimed that the Xerox Alto was the foundation of all personal computers so Jobs was stealing the idea anyway. By November 1983, Gates admitted that there were plans to create an Microsoft operating system to be launched on all IBMs and clones.
The product was called Windows. Steve Jobs was furious. Part of their partnership in 1982 onwards was that Microsoft would not develop any programs for IBM until a year after the MacIntosh launch in January 1983. Unfortunately, Apple did not launch the Macintosh until January, 1984 so Gates was within his rights to proceed with licensing to IBM. Gates came down to Apple, and Jobs assailed Gates “You’re ripping us off! We trusted you.” Bill Gates put it well, “We both had this neighbour named Xerox, and I broke into to house to steal the TV but found that you had already been there.” When Gates showed Jobs what he had developed for Windows, Jobs did not complain that it was stealing because he told Gates right to his face that Windows was a “piece of shit.” Jobs was almost crying about it, and went on a long walk in November 1983. Apple and Microsoft were now in serious conflict at this point. Windows was not launched until 1985 because it was not very good, but Microsoft made Windows better over time, and by 1995, it was dominant. Until the return of Jobs in 1997, there was a dark period of Microsoft dominance in the computer industry according to Jobs. The open system approach that Microsoft adopted by working with multiple hardware partners proved better because it allowed Microsoft to get on to multiple platforms for scalability. Meanwhile, other Apple developers began working with clones as well.
Two high energy college drops ended up shaping the commercial PC market. Bill Gates created a program for scheduling classes, and a car counting program while in high school. Gates was skilled at being logical, practical, and analytical while Jobs was design friendly, and less disciplined. Gates was methodical in his business style. Bill Gates was humane but could not make eye contact. Gates was fascinated by Jobs’ mesmerizing persona but saw Jobs as rude and cruel. Jobs has always maintained that Gates should have dropped acid to open up his mind to creativity. The only thing Gates was open to was licensing Microsoft to Apple but not on an exclusive basis. Jobs long believed that Gates was not a creative person, and that Gates ripped off other people’s ideas or at least did not have original ideas. Meanwhile, Gates derisively called Macintosh “S.A.N.D.” ie. Steve’s Amazing New Device. Gates mentions that he did no like Jobs’ management style, as Steve had a tendency to call his own co-workers idiots on a regular basis.
The rivalry was also beyond the personal. In 1982, Apple’s sales were $1 billion, while Microsoft made $23 million. Jobs had an attitude with Gates that suggested Gates should be honoured to work Jobs, it was insulting. From Jobs’ perspective, Gates did not understand the elegance of the Macintosh. There were 14 people working on the Macintosh while Microsoft programmers created applications that had 20 people working on programs to Mac. Their rivalry was deep and probably spurred innovation forward for that reason.
For Steve Jobs, you were either a genius or a shit-head/bozo. He sought absolute perfection, and he loved to define people according to this rubric. Steve Jobs tended to be high voltage and might actually say that an idea you proposed is ‘piece of shit idea’. But then he would turn around to propose your idea as his own a week later. Sometimes, he would then take your position in an argument, and agree with you just to mess you up. Jobs could not avoid impulsive opinions, his team at Macintosh were used to moderating his opinions, and not reacting to the extremes of either being a ‘piece of shit’ or ‘genius.’ At Macintosh in the 1981 – 1985 period, Atkinson taught his team to interpret “this is shit” to mean “how is this the best way?” when speaking with Jobs. Steve had a charismatic personality, and knew how to crush people psychologically. In addition, he had huge expectations with his Macintosh team, and it created a fear factor. If you demonstrated that you knew what you were talking about, Jobs would respect you. From 1981 onwards, employees were annually awarded for standing up to Steve Jobs. One marketing specialist stood up to Jobs twice because the marketing projections were unrealistic in 1981. She won the award having at one point threatened to stab Jobs in the heart.
In May 1985, the boardroom meeting to demote Jobs from Macintosh was nasty. Jobs presented his case first saying that Scully did not care about computers but in response a manager retorted that Jobs had been behaving foolishly for over a year. Scully then presented his case to the board for demoting Jobs and stated that he (Scully) would either get his way or they would need a new CEO. Scully said that Jobs should be transitioned slowly out of the management role at Macintosh. Jobs felt betrayed by Scully. Steve Jobs was emotionally unstable, and even felt as though he should be able to repair his friendship with Scully. Meanwhile, Jobs would spend a lot of time plotting against Scully in light of his career crisis.
Advertising Does Matter:
The 1984 Ridley Scott advertisement entitled “1984” was a way of affirming a desired renegade style, and attached Apple Computers with the rebels, and hackers. Ironically, Apple was a controlled system. Jobs believed in total control. Initially, the 1984 Ad was not popular on the board at Apple. Markkula and Scully thought it was the worst commercial ever, and that they should not put it on during the Superbowl. They were proven wrong by the timelessness of that 1984 Ad. The next advertisement in 1985 was an ad focused on insulting business people by showing them that they were walking off a cliff as if to suggest that they were blindly following the IBM brand. When the commercial was featured at the 1985 Superbowl in January, there was little reaction, and in truth it was a blunder since it insulted the market it was trying to reach. Apple performed poorly in 1985, the ad is not the cause of the outcome but was a symptom of Apple’s situation in 1985; IBM was expanding immensely.
Frame Your Business Around War – Big Blue Versus Apple:
During the 1984 Apple shareholder meeting, Jobs set the stage for the epic conflict between IBM and Apple. The question Jobs asked at the 1984 conference was “Will Big Blue dominate the entire computer market? Will they control the entire information age? Was Geroge Orwell right?” These rhetorical questions helped inspire his company. Afterall, IBM did not have the vision to buy Xerox in the 1950s. Computer dealers fear IBM dominance on pricing. For Jobs, it was about Apple versus evil. Apple is the only hope against Big Blue. With that frame of mind, Apple could do anything. The MacIntosh was finally launched on “time” in January, 1984.
When Scully joined Apple, he was surprised at the disorder, and bickering between Jobs and the Lisa team over a) why Lisa was a failure, and b) why Macintosh had not been launched in 1983. Scully felt that Apple was ‘like a household where everyone were running to the beach when there was an earthquake only to discover a tsunami was approaching that forced them back into the house.’ (Isaacson Biography). Things weren’t great on the numbers side for Scully’s first year as CEO either. He had to announce at the 1984 shareholders meeting that 1983 was a bad year for Apple. It was. The competitors were entering the market with cheaper products that were not as user-friendly as Apple but still semi-useful machines. The Apple balance sheet still showed major growth but IBM had launched the PC, and there were many lower-priced clones on the market in 1981 onward which were harming Apple’s competitive advantage.
But Macintosh was marketed as “the computer for the rest of us” and would refocus Apples efforts away from their core Apple II & LISA product offerings. Apples future was bright because there were 25 million information based users in offices across America, and their work had not changed much since the industrial revolution. The only desktop product people used was the phone until the personal computer. Apple hoped that their market share would expand with the unveiling of Macintosh….1984 would prove pivotal for Apples future (to be continued). Below is the balance sheet for the January 24th, 1984 Apple Shareholders meeting. Apple was a chaotic start-up turned revolutionary full fledged company. It was a messy operation from the standpoint of senior management but generally Apple worked.
Fiscal Year 1983
Cash and Investments
Receivables – Net
Total Current Assets
Net Fixed Assets
Total Liabilities & Equity
Freemont, California was the location of Apples new automated factory overlooking the Ford manufacturing facility. Apple was more profitable in its early years of existence relative to Ford. Apple was indeed a miraculous company. Jobs spent time going over the machines in the new factory in 1984, at one point, he demanded that the Apple team repaint the machines for aesthetics. This repainting actually screwed up their machines, however, and corrections proved costly. The Apple factory had white walls, and beautiful machines. Jobs believed the factory was a way to establish a passion for Apple amongst employees. Jobs was influenced by the Japanese manufacturing which had a sense of team and discipline. Debby Coleman, a Stanford MBA, was the operations manager. By the end of 1984, the Macintosh’s performance in sales was very low. They had an expensive factory but a failed product.
Renegades weren’t such a problem to Steve Jobs. In fact, he respected those who stood up to him if they knew what they were talking about on the Macintosh team. Often if they disagreed with Jobs, they realized that they could ignore Jobs’ commandments, and in so doing effectively spare Jobs the embarrassment of making a mistake or a bad judgement. One such incident involved the disk drive called Twiggy which was defective in the Lisa. The alternative would be a 3½ disk drive which was designed by Sony. The dirty Tokyo disk drive factory in Sony did not impress Jobs and he wanted to go with Alps disk drive which had made a clone of the Sony product. So Jobs decided to do a deal with Alps (a competing manufacturer), but Bob Belleville (behind Jobs’ back) decided to hire Sony in secret without Jobs’s approval.
Belleville hired Komoto who was tasked with building a disk drive for the MacIntosh from 1982-83, but Belleville did not want Jobs to know about this backup plan for the disk drive collaboration taking place at Alps, the Japanese company. Whenever Jobs came through the Macintosh office, Komoto was quickly escorted into a closet, or under a desk where he would have to hide for a few minutes at a time. In May 1983, the Alps team in Japan failed to deliver their disk drive, and asked for an additional 18 more months to work out the problems. It was a disaster as Mark Markkula grilled Jobs about what he was going to do about the lack of a disk drive with the MacIntosh launch potentially being pushed back to 1985? Bob Belleville saved Jobs by interjecting that Bob had a disk drive ready thanks to his secret work without Jobs’ approval. Jobs appreciated this renegade behaviour, and swallowed his pride. So we can infer that winning is more important than being right in management.
Jobs required perfection. When Adam Osborne produced a messy portable computer that was sufficient , Jobs would cry that “Osborne just doesn’t get it!” as he would frequently storm around the Macintosh office. Steve Jobs refused to compromise on perfection in the name of price, and deadlines. If someone didn’t care to be perfect they were a bozo in Steve Jobs view. There were many bozos at Apple. Jobs did not hand trade offs well. Steve Jobs wanted a smooth looking Macintosh computer, and underwent many adjustments in the design of the Macintosh system.
He pushed to have rectangles with rounded corners included in a basic Mac program. Jobs learned to love type-faced fonts for the Macintosh. Since the computer could allow such fonts, they developed different one named after streets in New York. The Macintosh fonts would help launch deskstop publishing, and allow people outside of publishing houses to learn about the value of font styles. Steve Jobs went through 20 different title bars on the Macintosh OS screen before he was satisfied. When his colleagues claimed that the title bars were not that important, Jobs went crazy, title bars were going to be viewed every day by millions of people!
Steve Jobs was too rough-edged to be Apple CEO so Markkula and Jobs went shopping for an alternative. They focused away from the tech sector to find a marketing genius. John Scully was an outsider who was an expert in management, and a consumer marketer who had a corporate polish. He invented the Pepsi Challenge campaign at Pepsi, and he was good at marketing, and advertising. Scully was struck by how poorly marketed computers were in the mid-1980s. Scully did not actually like computers because they seemed to be too much trouble, however Scully was enthusiastic about selling something more interesting than Pepsi Co.
Scully decided that Apple should work on the idea of ‘enriching their users lives’. Scully was good at generating PR, and excitement around Pepsi. The ability to generate a buzz about Pepsi would be replicated by Steve Jobs in the unveiling of new Apple products subsequently. Initially the two hit it off very well in their meetings about Scully joining Apple. They both admitted to be smitten with each-other over the big ideas surrounding computer technology. Jobs knew how to manipulate Scully’s insecurities to his advantage. Jobs and Scully seemed to understand each-other, and they had become friends, and emotional confidants. The problem was that most marketing people are paid posers, according to a former Apple manager. Scully actually did not care about computers but cared largely about marketing, and selling an idea to the public.
When Jobs showed Scully the Macintosh, he was more interested in Steve Jobs presentation skills than the computer itself. Scully claimed to share with Jobs goals but he was not 100% enamored with the product. Steve Jobs knew that Scully would be able to teach him the most, and Scully successfully sold Jobs the idea of his being appropriate for Apple. Jobs asked him famously: “do you want to go on the rest of your life selling sugar water, or do you want a chance to change the world.” Scully received $1,000,000 in salary, and a $1,000,000 signing bonus as the new CEO of Apple in April 1983.
The Original Macintosh Had Bad Sales:
During the planning for the release of Macintosh, the marketing costs needed to be factored into the price according to then CEO John Scully. Scully said $1,999 price was too low because the marketing budget required to spend more in order to sell Apple to the masses. As a result, they set the price to $2,499 for the Macintosh. Steve Jobs argues that this price was the reason that the Macintosh did not sell well in 1984. After the 2nd quarter of 1984, Macintosh started to slump in sales. It was slow, dazzling but not powerful enough. In addition, Macintosh had only 2 applications so there was a major software development gap. It was beautiful but Macintosh used a lot of memory. Lisa functioned on 1000K of Ram. Macintosh had 128K of Ram. There was lack of an internal hard-disk drive.
Jobs wanted to have a floppy disk drive. Macintosh did not have a fan so it over heated easily. When people became aware of flaws, reality hit. By the end of 1984, Jobs made a strange decision, he took unsold Lisa’s grafted on a Macintosh emulation program, and sold them as a new product. Jobs was producing something that wasn’t real, it sold well, and then it had to be discontinued within the company once the extra LISA’s were sold.
The distribution system did not respond to demand effectively, and there was an inventory backlog which was unintended by Apple Inc. Macintosh very simply did not sell well enough for the production level of building a copy of the computer every 23 seconds. This would later help Jobs realise that a Just-In-Time inventory strategy would be better suited. This was Dell computer’s competitive advantage.
On balance, Jobs’ marketing from 77 to 85 was brilliant but there were some patchy points. Not everything that Apple did on a marketing level had been genius under Jobs’ influence in the 1977-1985 era. We always talk about the 1984 commercial but check out the worst Apple ad ever from 1985 which reads: “you corporate hacks are buying IBM computers without really thinking.”
Scully thought that Jobs was a perfectionist, while Scully didn’t care about products at all. Scully did not learn quickly in his new role but was instead focused on marketing and management rather than the products according to Steve Jobs’ recollection. In addition, Scully seemed to be clueless that Jobs was manipulating him with flattery, while Scully believed in keeping people happy and worrying about relationships. Outside of Apple, the market responded negatively to Macintosh and by mid-84 into 85 a crisis was growing. By early 1985, the managers had told John Scully that he was supposed to run the company and be less eager to please Jobs. Also, Steve Jobs was told to stop criticizing other departments in Apple which was becoming difficult to stomach. Sales in the first quarter of 1985 were only 10% of their projections. Management changes were on the horizon.
Steve Jobs’ abuse of others increased through character assassinations and intense and direct criticism but this was also coupled with a quickly declining market share. Many middle managers rose up against Jobs. Noting the increased tension, Steve Jobs asked Scully if Jobs could create a Macintosh in a book-like format while also heading an “Apple Labs” project as a new R&D off-shoot of Apple Computers. From Scully’s perspective, if Jobs agreed to leave Macintosh, this solution would solve the management issues and get rid of Jobs’ presence at Apple’s head office. Jean-Louis Gassee would move in to take over the Macintosh only if he could avoid working under Jobs. The problem was that Jobs did not want to quit MacIntosh but wanted more responsibility by running both Macintosh and the new R&D project. Finally, Scully had a meeting with Mike Murray. By mid-1985, Apple executives started to blame Jobs for the miscalculated forecasting of Mac sales and resentment built up due to Job’s management style. Mike Murray, Jobs’ lieutenant in marketing, wrote a memo summarizing the problems that Apple had. Murray laid a lot of blame on Steve Jobs which was a coup considering his closeness to Jobs. Murray pointed out that Jobs had a controlled power-base within the company which created a strategic alliance amongst high value employees. When Scully confronted Jobs, he said that it wasn’t going to work with Jobs’ approach at the Macintosh division. Jobs said that Scully did not spend enough time teaching Jobs as an excuse for the demotion that Scully was proposing ie start an R&D division outside of Apple. Jobs was erratic, he would reach out to Scully, and then lash-out at him behind his back. Jobs would phone one manager at 9pm to discuss Scully’s poor performance, and then he would phone Scully at 11pm to say that he loved working with Scully. The end of the line for Jobs was approaching quickly.
In 1985, Jobs refused a $50,000 bonus for Macintosh engineers who went on vacation during the bonus awarding period. Andy Hurtzfeld quit because he didn’t like Macintosh’s team, or Jobs. Woz and Jobs were no longer friends. As an expression of that, Jobs also shot down Wozniak’s universal remote control company ‘Cloud 9’ by arguing that the design agency should not be allowed to work with 3rd party companies such a Woz’s. Steve Wozniak left Apple saying that the company was not being run properly for the past 5 years. Jobs was vindictive, and convinced himself that Woz’s remote control designs was a problem because it resembled other of Frog’s designs which were used to design Apple products. In 1999, Adobe refused to write programs for the iMac, so when the iPhone was released, Steve Jobs refused to allow flash on its products arguing that these products ate too much battery power, when in reality the core problem was that Adobe had screwed Apple in the past. In other words, being vindictive is part of business leadership as far as Steve Jobs is concerned.
Apple wanted to build a relationship with Rolling Stone magazine, and Steve Jobs pitched them to get on the cover but they rejected Jobs’ idea. In response, Jobs said that Rolling Stone was a piece of shit in the early 1980s to a Rolling Stone journalist, and that they needed to get a new audience of people who care about technology.
John Scully, and Steve Jobs were perfectionists, and they were self-deluded about each other. They had different values, and Scully did not learn quickly. Jobs managed to manipulate Scully into believing Scully was exceptional. Jobs was secretly astounded at Scully’s deference. Scully would never yell at employees, or treat them horribly as Jobs had. Jobs tried to find similarities between himself and Scully in order to justify choosing Scully as Apple’s CEO. Thinking in this way is a mistake.
As Jobs stepped in the limelight again at MacWorld 1997, he announced a partnership with Bill Gates’ Microsoft stating that a zero-sum game (between Apple and Microsoft) was not the way forward. Gates had stolen the Graphical User Interface from MacIntosh which was borrowed from Xerox PARC, but had struck a deal with Scully to not release a GUI until after 1988. When Windows 2.0 was released, Apple sued them unsuccessfully for IP theft. By 1997, Gates refused to help Amelio create a Word processor. When Clinton began building an anti-trust case against Microsoft for their near monopoly (particularly their destruction of Netscape), and other unethical business practices, Jobs told a Justice department official to continue if only to allow Apple to develop an alternative.
Steve Jobs closed a simple deal with Gates with the agreement that Apple would stop suing Microsoft for stolen IP, while Microsoft would have a $150 million stake in Apple with non-voting shares, and produce Microsoft Office, and Microsoft Explorer for the Mac. At MacWorld 1997, this decision to work with Microsoft was very controversial, and there was a public relations gaffe that Jobs would later regret. When introducing Bill Gates at MacWorld, Jobs decided to have Bill Gates beamed into the auditorium via satellite. The only problem was that Bill Gates was put on a giant projector screen over looking the audience like a powerful overlord or Big Brother.
The Friday executive meeting (in May 1985) was where Scully would confront Jobs about the attempted coup. Jobs said that “Scully was bad for Apple, and the wrong guy, you don’t know how to develop products. I wanted you to help me grow, and you have been ineffective in helping me.” Jobs said that he would run Apple better, so Scully polled the room with each person explaining who would be better for Apple. “It’s me or Steve. Vote.” Everyone supported Scully, and Jobs started to cry again. Jobs left Apple with his core MacIntosh staff. Scully was very upset about what happened. Scully’s wife confront Jobs in a parking lot and said that he had nothing behind his eyes other than a bottomless pit.
As the summer of 1985 approached and Jobs was transitioning out of his leadership role as the head of the Macintosh division, he begged Scully to reverse the boardroom decision. Scully refused and argued that Jobs had failed to get another Macintosh out to market. May 14th, Tuesday 1985, with a boardroom present Jobs was defiant and argued that it was alright to have Apple II and Macintosh developing two different disk drives. Jobs begged Scully again not to move him out of the role, and in-front of the board, Scully said no. The die was cast. Scully was planning on going to China to launch the opening of Apple to the Chinese computer market, so Jobs started to plan his coup around the Memorial weekend visit that Scully would be going on. Jobs went around canvassing for the support needed to swing the board against Scully.
The board was largely with Scully. Jobs revealed his plans to Jean-Louis Gassee who was the guy that Scully was going to replace Jobs with. Naturally, Gassee told Scully who immediately cancelled his trip to China. Jobs refused to accept the reorganization of Apple with Jobs as a product visionary. Jobs did not want to play ball. Jobs was excluded from management reports. It was a personal and career disaster for Jobs.
Targeting The Education Market Is Not Lucrative:
In September 1985, Steve Jobs announced to the Apple board that he would be focusing on a computer for the higher education market in a new company of his own. This was an outstandingly strange decision since it is not as lucrative as other areas, but he saw a market share for himself. Apple dominated the education market so Jobs took with him key people who would be useful for his goal. Their team would then have proprietary information about Apple’s future goals in the education sector. Jobs raided key employees in a somewhat vindictive manner. Even Markkula was offended at how ungentlemanly he was behaving. So Apple sued Steve Jobs for (a) secretly taking advantage Apple’s plans for the product, (b) secretly undermined Apple by getting new people, and (c) secretly being disloyal to Apple by using their information.
Jobs believed that killing the Macintosh clones was the way forward in 1997. He felt that licensing the Mac OS software to third party hardware producers was a mistake and that the largest battle was the software licensing problem for Apple. The problem was that by having a closed system, Apple had to manage its own software development. Microsoft dominated because they produced software that was cross-platform. The clones of Apple cannibalized Apples’ own computer sales even if these clones had to pay Apple software at $80 per sale. Jobs believed that hardware, and software should be integrated, and Jobs wanted to control the user experience from end to end. With this return to Apple’s roots, Jobs was setting a course for creating a closed, highly controlled user experience that had pros and cons.
NeXT was created to build beautiful computers but they completely flopped in the market place because of important issues like price and release date timing. Jobs was able to explore his whims as an artist at NeXT which would be useful later on. The logo of NeXT was designed by Paul Rand who did the IBM logo and it arguably one of the best in tech in the 1980s. The logo boasted big potential that did not fully materialize as it had at Apple. Meanwhile, Jobs had asked Frog (the design firm involved in various Apple products) to not work with Wozniak and threatened legal action in order to harm Wozniak’s ability to create his own company (Woz had departed Apple in 1985 citing disappointment with how Apple had changed under Scully and Jobs). In addition, Jobs resolved the lawsuit placed against him by Scully and Apple after his departure. NeXT agreed to a) not compete with Apple by launching only after March 1987, b) produce an education computer only, c) NeXT could not use an operating system compatible with Apple. The final one was a bit silly since that was not in its interests.
The NeXT cube was difficult to manufacture because the cube was built at 90 degree angles and got stuck in the moulds. The modules/moulds were extremely expensive to fix. Jobs insisted on a mat black casing but this was indulgent at best. The screws inside the machine had to have expensive plating to hide their presence. As usual, Steve Jobs was eager to put people down at NeXT. Jobs treated his employees harshly because he believed in excellence. At Apple in 2000, the Apple Cube was a huge failure. Jobs admitted that he over priced the 2000 – 2001 Apple Cube like he had done with the NeXT computer, and the Apple stock cratered after the release of the Apple Cube in the same way that the NeXT computer under-performed after its release. History frequently repeats itself with Jobs; both success and failure.
Gates did not like NeXT, in particular he did not like the lack of compatibility of the NeXTWorld application specifications with the rest of the software industry. When Jobs invited Gates to visit his NeXT offices, Jobs made Gates wait for 30 minutes in a glass waiting room while Jobs chatted with multiple people in clear view just to spite Gates. The two hated eachother. Gates was not cooperative largely due to external factors, just as he was with the iPhone but treating Gates poorly did not help Steve Jobs’ business development strategy. Gates thought the black casing of NeXT did not make sense, and refused to allocate staff to develop for it. Gates did not think there was a market for the NeXT computer because it was yet another closed system like Apple itself. NeXT was based on an optical disc which was impressive but Microsoft did not like the end to end control that Jobs inevitably pushed for. Steve Jobs tried to get NeXT software on the IBM in order to get further sources of revenue but by the late 198s, IBM was tanking out of the computer operating system market. The core problem was that NeXT Step was not compatible with anything! Microsoft wanted the monopoly, and Gates did everything he could to prevent Jobs from going forward with his project. Jobs cut off the possibility of NeXT clones that could expand the base of available computers in the market thereby increasing the potential sale of NeXT software but he stubbornly remained an advocate of the closed system.
Jobs gutted, and rebuilt the building that he purchased for the NeXT headquarters….twice. He wasted a lot of money on designing colourful machines at the NeXT factory much like the Macintosh factory. He also invested in an amazing factory that would be highly valued when it had to be shutdown. NeXT’s stair cases were built out of sturdy glass, an idea later applied to Apple stores. The process of ‘conbon’ was applied at NeXT. The tech office was lavish.
the initial 18 months of development needed to get NeXT going required $7 million dollars of Jobs’ own money. NeXT was valued at 30 million dollars, and there was little to show for it, and no revenue. Ross Perot was dazzled by Steve Jobs’ vision based on a now famous documentary about NeXT. Ross Perot had made his fortune competing against IBM and had become a VC for other aspiring entrepreneurs in tech. The fact was that Ross Perot missed out a deal with Bill Gates at Microsoft during the early days at Microsoft and Perot deeply regretted it. Ross Perot would get 16% of equity in the company for $20 million after Jobs put in another $5 million meaning the company was worth $126 million dollars. Ross Perot built a narrative around Steve Jobs about “a rags to richest genius who had to either start a company or get a job, a week later the Apple I was finished.” It was a fantasy that Ross Perot created.
October 1988, the NeXT launch was an amazing event. After 3 years of consulting with universities across the country, Jobs was betting the company on new technology. Every minor detail was analysed and reworked as the release windows passed for the NeXT computer. In an effort to seek out the best quality technology, Jobs built a highly advanced product but NeXT did not have a floppy disk which was rare for the era. NeXT was risked on the lavish use of Steve Job’s finances to set up his company, and he targeted the higher education industry. The problem was that the features were great but the price of the product was $6,500. At the launch, the applause was scattered when Jobs announced the price tag, the academics were extremely disappointed at the launch event for NeXT because the machine was too expensive. Apparently, the education sector representatives of his NeXT launch were shocked at the cost given the feedback that NeXT had no doubt received. The price has to be low enough to scale the product into universities, other wise the sales pitch has to be extremely aggressive. This price shock was reflected in the sales.
Instead of focusing on price, Jobs’ team focused on features and other details…universities didn’t buy the product. Pricing a product is essential. Most of the features were trivial for the NeXT. In addition, there were too few people interested in building software for the NeXT, and the price was a massive deterrent. In addition, the NeXT was incompatible because few developers were designing the software needed to use the product. Jobs’ strategy was to target the workstations industry where Sun was dominant. It failed, and in 1991, NeXT stopped making hardware much like Jobs had given hardware up at Pixar. By the mid-1990s, NeXT was working in the Operating System market exclusively.
Pixar needed to challenge Disney’s dominance in animation. Toy Story’s success was heavily associated with Disney which was frustrating to Jobs because Pixar created Toy Story. Jobs felt that Pixar was helping Disney roll out their movies and taking all of the credit for Toy Story. Pixar ran and created the movie, and Disney was the distributing channel. There was a need to go public with the Pixar considering that Toy Story was the top grossing film in 1995.
When Pixar was in trouble in 1988, Jobs needed to fire people which he did with a complete lack of empathy. The company was failing partly because their mass market animation hardware did not sell well. He gave these redundant employees a notice of two weeks, but this was retroactive from two weeks before the date of termination! Fast forward to 1995, Pixar was worth $39 per share on the first day of the IPO, Steve Jobs made $1.2 billion dollars in the initial IPO stage (a huge portion of its value). With the success of the IPO, Pixar wanted to assert a co-branding relationship with Disney, rather then being just a studio. Steve Jobs fought to make sure Pixar was every bit as valuable as Disney which later resulted in a Disney take over at a huge valuation.
Art Reflects Reality
Jobs bought Pixar from Lucas films and became a majority stakeholder in 1986. Pixar was technology meeting art which was perfect for Jobs who wanted to live on the intersection of the humanities and technology. He looked into the finance, and strategy in the late 80s to familiarize himself more with the bean counting elements of business. Jobs spewed out all kinds of crazy and good ideas at Pixar meetings. He even tried to sell hardware, and software design via a digital animation product called Renderman but this did not sell well. In the early 1990s, John Lasseter came up with Toy Story. Originally, Woody was a nasty character (who acted like Steve Jobs) but finally they decided to change the story so that Woody was no longer a mean character, and the film was very successful after much difficulty with Disney. A Bug’s Life tells the story of an Ant with all kinds of crazy and good ideas, but he gets in trouble with the colony and he is then expelled from the colony. He goes out to find a solution to the colony’s grasshopper problem, and ends up saving the colony. It basically follows the same life pattern as Steve Jobs who was fired from Apple, only to triumphantly return.
Woody Allen’s Antz film was not a huge success but it was used to challenge the Disney production A Bug’s Life. Katzenberg (Dreamworks) wanted to copy Pixar’s Ant movie, and so Hollywood had two Ant movies being made in the same year. Katzenberg have a falling out with Disney in the mid-90s after being responsible for productions like Little Mermaid and Aladdin. Later Finding Nemo was the most popular DVD and sold $0.867 billion, and Pixar made $521 million with the showdown from Disney. Pixar was producing the films, and Disney was the distribution channel.
During his transition into the leadership of Apple, Steve Jobs hired Larry Ellison, and other board members who were all loyal to Jobs. This would allow Jobs to take complete control over the company, and give him the breath of control needed to execute the long list of chances that were needed to fix Apple. Once the board was set, Steve Jobs become the CEO of Apple, and he took a salary of $1. The next step would be to rebuild the company. Instead of building Apple off of the divisions in a product line model used originally, with Jobs, there were to be no divisions with independent bottom-lines. Jobs wanted to have a cohesive structure so that he could directly control the company from the top down. He would be able to interact with smaller teams, who were in constant dialogue with each other rather than in painful competition against each other. Instead of a competitive bureaucratic structure where teams competed against eachother, Apple was now a heavily top-down organisation.
By 1996, Apple had a 4% share of the market from a high of 16% in the late 1980s. Apple had expanded into every technology sector with a wide variety of products over the decade + that Jobs had been outcasted. John Scully did not think that high-tech could be sold to mass markets. According to Jobs, in the 1990s, Scully brought in corrupt people that wanted to make money only for themselves rather than create new ideas through Apple. Scully’s drive for profits at the cost of market share reduced Apple’s value. Apple’s decline was due to its inability to innovate in any area. The Macintosh hardly improved after Jobs had left. In one instance, Jobs was asked to autograph a late-1980s model of the Macintosh keyboard but first he insisted that the arrow keys be removed. Jobs hated the arrows on the keyboard and viewed it as an example of bad decision-making within Apple. Apple was almost sold to Sun and HP in 1996, Apple’s stock fell to $14 in 1996. In 1994, Gil Amelio became the CEO of Apple and wanted to integrate the Apple with Windows NT which would have corrupted Apple further. Amelio did not like Jobs much, and thought Jobs was trying the reality distortion field at every point of interaction.
tion. Amelio was probably right.
In 1983, Jobs loved Microsoft Excel so he made an offer to Gates. If Gates agreed to produce Excel exclusively for Apple for the first 2 years, then Jobs would shutdown his team working on BASIC, and license Gates’ BASIC. Gates accepted. This deal became a lever in future negotiations. When Jobs decided he wanted other companies to produce software for Apple, he exercised a clause in the contract with Gates so that Microsoft would not get an automatic bundling in every Macintosh sold. Instead of getting $10 per Application, per Macintosh sold, Microsoft would have to sell their products separately.
Gates knew that Jobs was good at playing fast and loose with the truth so he was not actually that upset because he then turned around, and started work on versions for IBM. Microsoft gave IBM priority, and Jobs’ decision to back out of the bundling deal was another major mistake by Jobs. When Gates and Jobs unveiled Excel, a reporter asked if Microsoft would be creating a version for IBM. Gates’ answer was “in time.” Jobs’ response was “Yes, in time, we’ll all be dead.”
In 1997, Apple was losing good people so Jobs pushed to give the best people a re-pricing of their stock options to ($13.29 per share) as Apple’s stocks were so low that they were nearly worthless. This was not considered good corporate practice. Having quality people was essential to ensure the success of the company. When the board said it would take 2 months to do a financial study, Jobs said he needed their absolute support now. His response was that he would not return on Monday if the board did not agree, Jobs needed to make thousands of decisions, and this was just one hurdle. Most of the board was happy to leave subsequently. Jobs said that the problem with Apples products was that they sucked.
NeXT was failing and idea of being bought by Apple in 1996 was a tantalizing prospect for Steve Jobs. He wanted to get back into Apple while Larry Ellison of Oracle wanted to get more money by buying Apple outright. However, Jobs wanted the moral high ground by not making money in the process of transitioning back into Apple. In 1996, Steve Jobs negotiated with Gil Amelio the purchase starting with Apple Computer buying $12 per share for $500 million valuation of NeXT. Amelio countered with $10 per share for $400 million valuation of NeXT, and Jobs agreed as long as he received a payout in cash.
Jobs would hold 100 million in cash, and 35 million in Apple stock. Gil Amelio was not sure about giving Jobs entry into the board of Apple because of the history of 1977-85. You could say that Gil Amelio was caught in Jobs’ reality distortion field because later Amelio would realise that Jobs was positioning himself to destroy Amelio as CEO of Apple. Jobs’ return to Apple was fortuitous; if you can merge with a major company then you are effectively be hired by that company. Bill Gates said that Amelio was an idiot for bringing NeXT into Apple, and that Jobs was a salesman without an engineering understanding. An early example of the feathers that Jobs ruffled circa 1997…
Do not race to the bottom on prices. Get your user to have an emotional connection with the product. Amelio’s approach was to build a cheap product based on sketches of bolder ideas. Jobs believed in digging into the depth of what a product should do. You need to understand the essence of a product in order to get rid of the parts that are not fundamental. Can you get 1 part to do 4 times as much work? Design was not about surface but design is the fundamental soul of a human-made creation. A good design can be ruined by a bad factory production. Products should be pure and seamless. Do not let the engineers drive design. Apple worked the other way. Jobs found Jonathan Ive to produce the core designs at Apple going forward.
There is an Apple office that Ive’s runs which is built around models for future design to see where the products are heading, and to get a sense of the whole company on one desk. Apple has patented hundreds of devices. They built the modern Apple company around the assumption that design and product trump profits. Together Steve Jobs and Jonathan Ive produced the iMac, iPod, iPhone, iPad, PowerMac 5, iBook.
“Skate where the pucks going, not where it’s been.” – Wayne Gretzky. Jobs believed that it was his goal to understand what the customer wants before they do. The iMac is about inspiring with a beautiful plastic blue, and it was translucent so that you could see into the machine. The casing would help to give all the components. The simplicity of the plastic shell had to be perfected, and they even studied jelly beans to see how it would be attractive. Some people at Apple wanted to conduct a study to see if the cost of the translucent casing would be justified by focus groups, Steve Jobs said no. iMac should sell for $1200, and produce an all in one consumer appliance. iMac did not include the floppy disk drive but it was ahead of its time. iMac was friendly so much so that there was a handle on the top of the iMac to actually pick it up. Jobs almost started crying because the iMac had a tray instead of a slot drive. May 1998 was the iMac launching. In 2001, iMac was changed to have a sunflower type design.
Jobs believed Amelio was a bozo. Gil Amelio did not actually present or sell himself particularly well, and he famously bombed on stage at MacWorld in 1996. That particular presentation was very poor and unplanned. Once back inside Apple, Jobs was too honest and spoke with one of the board members Willard who asked Jobs what he thought about Amelio. Jobs said that Amelio was not in the right job, and then added that Gil Amelio was the worst CEO ever. Famously, Gil Amelio had explained to a journalist that “Apple is like a ship, that ship is loaded with treasure, but there’s a hole in the ship. And my job is to get everyone to row in the same direction.” That lack of logic in this statement spoke to Amelio’s lack of efficiency as a leader.
Ellison tried to call for the drafting of Steve Jobs as CEO of Apple. When Amelio confronted Jobs about the possible takeover, Jobs denied any of it but refused to declare that he was not positioning himself for a takeover. Jobs loved to dish out flattery with Amelio, meanwhile Jobs was busy turning the board against Amelio, and Apple’s dire situation financially. People were leaving Apple, and thinking of leaving Apple which is never good when your people are an important asset. Amelio was fired because he was incompetent, but once Jobs was offered the CEO job, Steve Jobs moved into the interim CEO because he was still running Pixar. After years in the wilderness, Jobs was back at the top of Apple. The first thing he did there was to commit a subtle by significant vindictive act: Jobs hated the Newton personal assistant because you needed a stylus and also because the Newton was one major innovation of John Scully’s. Scully was the man who kicked Jobs out of Apple in 1985. Jobs cancelled the Newton.
Napster, Limewire, and other music file sharing websites allowed the illegal downloading of music on a massive scale, and a precipitous decline in sales of traditional distribution platforms for music which began dropping by 9% in 1998. The executives at the music companies were desperate to agree on a common standard for copy-right protection. If the music industry could agree to the coding of music across the industry, they might be able to get a head of the Peer-to-Peers. Sony and Universal came up with Press-Play. EMI had their own system alternative, each had a subscription based system where you would rent the music, and the two competing solutions would not license each other’s songs. The interfaces were clunky, and the services were terrible, the record companies did not get how to solve the problem. Warner/Sony wanted to close a deal with Jobs, largely because Warner/Sony did not know what to do. Steve Jobs was opposed to the theft of creative products even though he bootlegged Bob Dylan in the 1970s. If people copied Apple software, there would be no incentive for new music other than from the passion of musicians.
Creative companies never get started, and it’s wrong to steal, and it hurts your own character according to Jobs. iTunes was the alternative to the brain-dead services, iTunes was the legal alternative to P2P where everyone wins: a) users would no longer steal, b) record companies generate revenue, c) artists get paid, and d) Apple disrupts the music industry. Steve Jobs had a tough pitch with record companies because of the pricing model, but he used the fact that Apple was still only 5% of the computer market to convince them that such a deal was not have a major impact oo their bottomline. So if iTunes was destructive, it would not be quite so too damaging. Apple was a closed system, and so these Record companies could use Apple as means of controlling the MP3s.
Record companies got $0.77 of the $0.99. People wanted to own music, not rent, or subscribe to it. The subscription model did not make as much sense. Record companies had made a lot of money by having artists produce two or three good songs with 10 fillers, the iTunes store would allow users to select only the songs they liked, further upsetting Record companies. Steve Jobs’ response was that piracy had already deconstructed the album. He closed deals across the music industry which was astounding. Jobs bridged the gap between technology and art.
Think Different – the new slogan was not perfectly grammatical if you think about what you are trying to say: it is most appropriately think differently. Steve Jobs explained that Apple’s future in 1997 was to think differently. The craziness of Apple’s customer base was that they had a sense of creativity and uniqueness that others did not. Steve Jobs argued that Apple was distinctive as a brand, and they formulated a brand image campaign to celebrate what creative people could do with their Apple computers. The Think Different campaign was about reminding themselves about who they were. Here’s to the crazy ones, who think differently. Their television commercial was historic, as well as the posters for Think Different. Jobs believed in the renegade brand that people would choose because it made them feel proud and exclusive.
Sales of the iPod would drive sales of the iMac, and vice versa. They got a triple bang for the buck in advertising by invigorating the Apple, Mac, and iPod. Steve Jobs completely dominated the market for music players by putting all of his advertising spending on the Mac into the iPod. So the iPod advertised more aggressively at about 100 times more spend, than the closest competitor. The beautiful iPod cost $399, some people said that iPod stood for “idiots price our devices.” The iPod was about intersection between technology & arts, software & music.
When iTunes was released, Microsoft managers realized that they needed to create direct user value with an end to end service. Gates felt like an idiot once again, and Microsoft wanted to move forward although it was caught flat footed by Apple. So Microsoft tried to copy iTunes. When Apple created the compatible iPod, and iTunes systems for other PCs it meant that PC users would not have to buy Macs to use the iPod. Steve Jobs did not want to put iTunes on the PC. The cannibalization of not selling Macs was out weighed by the potential iPod sales. Once iPods went PC, Apple was on its way to be extremely extremely lucrative. Jobs said that iTunes for Windows was the best application for PCs ever. When Microsoft came up with Zune, it was obvious that they did not care about the music or the product. Steve Jobs believed that an iPhone might cannibalize sales for Mac, but it would not deter Jobs. When the inventor of the Walkman tried to compete against Apple, they were held back by cannibalization because Sony had a music department etc etc. In 2004, the iPod Mini was the next innovation which helped eliminated the portable music player competitions. Apple’s market share in the portable music player industry went from 35% to 75% in 18 months. The iPod Shuffle also helped grow it further because people like to be surprised. Jobs decided that they should get rid of the screen, you don’t need to navigate all you needed was to skip over the songs you heard.
Jobs could not include the first CD burners in the iMac because he hated trays. The mark of an innovative company is that it knows how to leapfrog when it finds itself behind in the development of new innovation. Napster exploded in growth, the number of blank CDs sales also increased massively in 1999, and Jobs worked hard to catch-up. Steve Jobs wanted to make music management easy. You can latterly drag, and burn a CD. Jobs bought a company called SoundJam, and instead of an interface to see your songs, Jobs wanted a simple search box. In 2001, iTunes was free to all Mac users. The next step was to create a portable player which was the simple interface. Getting all the record companies alongside iTunes would be the complicated part. By the fall of 2000, Apple was working towards this goal.
Fidel and Rubenstein clashed over the iPod because Fidel was charismatic, and wanted to claim control, and he had already been shopping around other companies to pitch his idea of a portable software based device which later became the iPod. They found small company to help them with the Mp3 technology. Steve Jobs wanted white on everything for the iPod, the purity of the white headphones became iconic. Steve Jobs pushed the idea of their iconic advertising. Apple’s whole history was making the software, and hardware together so the iPod made strategic sense. Gates said it was great, too bad it was only for Macs… By 2007 iPod was half of Apple’s revenues.
Android’s touch screen features was clearly stolen from the iPhone. They had a grid app list much like the iPhone. The swipe to open, pinch to expand, these were all Apple ideas that Google was implementing. Google was engaged in grand theft as far as Steve Jobs was concerned. Jobs went to Google, and shouted at everyone there. Jobs wanted Android to stop stealing their ideas. The open source code approach was valuable because Google was able to sell their platform to multiple mobile phone providers where Apple had more control. Nonetheless the Apple App market is much larger than the Google one to this day.
Apple’s MobileMe was a failure because it did not sync data. It was expensive but iCloud was the future. This was not a new idea. In 1997, Steve Jobs explained that at NeXT he had all of his data on the server. The idea is that you won’t have to back up your computer by downloading into the iCloud. All you stuff is on the server, Jobs was talking about this idea as early as 1997. The concept that everything would work simply has been applied to cloud computing. Microsoft said that CloudPower would allow individuals to access their content wherever they are but this opens up the door to licensing agreements etc. In a final twists, the Apple Campus is under construction and will be completed in 2015. It is similar to Google HQ. Copied?
The digital camera industry was destroyed by cellphones, and Steve Jobs knew that in order to stay ahead of the wave, they would have to cover the cellphone market as well. The iPhone was born out of a concern that Nokia et al would eat Apple’s lunch by creating mobile photos that could easily play music, just as Nokia et al had crushed Kodak. Motorola was a stupid company to Jobs because the Rokr was a joke. Jobs realized that the iPod wheel was not going to dial phone numbers. Jobs was working on the iPad with the touch screen system before the birth of the iPhone. The ability to process multiple touch items was Steve Jobs’ ideas. They wanted to transfer the track pad to the computer screen. Ive never made a demonstration with other people because he know Jobs would shoot it down. The tablet development was put on hold, and shifted to the iPhone screen. Jobs split the multi touch track pads and wheel based iPhone plans. The case could not be opened, and Apple made sure that people could not access the iPhone. The iPhone was three products bundled into one: 1) internet interface, 2) mobile phone, and 3) touch controls. The iPhone was a massively successful product even though it was the most expensive phone in the world $500. Ballmer said the iPhone sucked because business people want a keyboard. Apple sold 90 million phones within months.
Everything you do incorrectly is in order to get it right. If something isn’t right you can’t fix it later. Steve Jobs wanted to control the customer experience, which included the experience of creating wood, stone, steel, and glass an Apple store. Mega chains were where the salesman did not care about Apple because other products were available. Jobs was impressed by the Gap store business, and Jobs hired Drexler from Gap to build a prototype of the store. Tim Cook, reduced key suppliers from 120 to 24, forced many to move closed to Apple’s plants. He helped save Apple a great deal of money. Apple stores were strategically placed in Covent Garden London, or in New York. Sales are quickly tabulated using Oracle technology every 4 minutes so that they have a lean manufacturing production line, and the building of products can respond to market demand quickly.
Converge Old Devices Into 1 New Device:
Is there room for something in the middle of the iPhone and PC, Jobs asked in 2010? The iPad allows people to bring technologies together. The iPad was not sold as well as the iPhone. The name iPad was ridiculed as a women’s hygiene product. Gates still believed that it’s a nice reader but didn’t like the iPad. Further divergence in views suggests that Gates believed in a stylus while Jobs said we already have 10 stylus’. There were 800 emails in Steve Jobs’ inbox. The iPad had the limitation that it was for consumers but does not facilitate creation. The iPad arguably mutes the user turning you back into a passive observer. The question about iPad was whether it should be closed. Google’s Android was an open platform that could be used openly. The iPad was the clearest test of the closed-system model versus the open-system model. In the end, iPad was the most successful consumer product launch in history with 1 million sold in the first month. Jobs was in the process of changing the print industry, he closed deals like he did with the music industry. Apple would take a 30% take of the subscriptions sold, and Apple would have all of their purchase information which they would use later on. The problem was the publishing industry did not want the subscription base to be controlled by Apple since Apple would then change the prices. Steve Jobs believed that the paper textbook was going to be a industry ripe for digital destruction, and created digital versions of the products. The Chinese employees are paid $2.00 per day. It takes 5 days, and 3500 hands to produce 1 iPad in Foxconn China.
Do Not Ignore Medical Diagnoses:
When Jobs was diagnosed with cancer, he did not rush to have surgery to remove the tumour found in his pancreas. Instead, he tried to see if other treatments would work. Why was he hesitant? Partly because he had difficulty with the idea of opening up his body. He went under herbal remedies and psychic treatments as a result of his quibbling. As a response to his psychological concerns, Steve Jobs tried to cure himself in strange ways: reality is unforgiving. Once again, he was able to filter out the world, and ignore stuff that he does not want to confront. Jobs had been rewarded for willing things away, but in July 2004, the cancer had spread. Finally, he underwent surgery in 2004 but a less radical surgery.
The cancer had spread into the liver. Had doctors operated 9 months earlier they would have possibly arrested it. When he had a liver transplant in 2009 by going to another state and by having a multiple listing, the liver Jobs received was the product of a car accident that killed a 25 year old. Steve Jobs lied about his condition throughout the last years of his life by calling it a hormone imbalance. The privacy rights of the CEO had to be weighed, but Jobs also embodied his company more than most CEOs so the impact of negative news regarding his health could have an impact on the stock.
Make Peace With Your Old Enemies:
Microsoft had stolen the interface developed by Apple with multiple clip windows etc. IN 1997 Jobs announced that the only way forward was to make a deal with Bill Gates and Microsoft. In 2007, Bill Gates and Steve Jobs got together to talk about technology. It is an EPIC discussion.
Follow Your Heart:
there is no reason to not follow your heart, and gain meaning because you will be dead one day. Don’t live someone else’s dream. Stay hungry, stay foolish. The Stanford University commencement address is considered one of the greatest commencement ever made.Jobs did not believe that people should be materialistic but should seek to be valuable.
Steve Jobs Was A Brilliant Jerk
From the creator of Going Clear, Steve Jobs: The Man In The Machine is about the now infamous career flaws of one of the most successfull entrepreneurs in American history. It looks like a good rehashing of memories from 2012 when everyone you knew + your grandma read the Isaacson’s biography. I’m certain Kutcher and the script writers of the disappointing Jobs film are going to have a front row seat as they didn’t actually read the Isaacson biography….’cause that film sucked badly.
- a) abandoned his own daughter and girlfriend,
- b) cheated Wozniak out of a bonus at Atari,
- c) verbally assaulted the LISA team and created intense competition between teams,
- d) screamed at Macintosh developers regularly,
- e) cried like a baby when the iMac CD tray was a tray not a slot,
- f) fired employees with retroactive consequences to their salary,
- g) parked his car in the handicap spot,
- h) sped down the highway regularly,
- i) discovered his Syrian father (who also abandoned him) was the owner of the restaurant chain he frequented regularly but never came by to say “hi”,
- j) tried to instigate a coup against foolish management and lost…
- k) cried whenever someone disagreed with him,
- l) attacked creative ideas for being idiotic then within a week apprioriated them as his own,
- m) called his co-workers idiots and bozos whenever they fell short of his goals,
- n) his colleagues had to hide a disc drive developer in the Macintosh supply closet (whenever Jobs visited) in order to prevent Jobs from discovering a parallel disc drive solution was being built which ultimately saved Jobs from disaster as his solution failed,
- o) he refused to donate to any charity ever,
- p) built and painted an expensive factory at NExT meanwhile the product completely bombed,
- q) refused to give shares to one of his earliest Apple colleagues even though the guy put in many hours into the project and begged Jobs for a small part of the equity,
- r) made his step-mom answer early customer service calls to Apple without pay (laugh out loud)….
- s) took the tv away from his step-dad who wanted to watch football in order to program Apple’s……
- t) declared war on IBM as a means of galvanising his company,
- u) claimed Microsoft was stealing Apple’s ideas when both actually stole from Xerox PARC,
- v) tried to destroy Adobe and any organisation that expected fair treatment…
This list is not exhaustive & what can we learn from this list, right?