Donald Luskin Read online

  Steve was growing up in the heart of what would become known as Silicon Valley, already in the late 1960s a vibrant epicenter of electronics companies springing up to service NASA’s Apollo space program. It was a fresh field fertilized by new silicon transistor and integrated circuit technology that fostered entrepreneurial zeal and new business rules. The Jobses’ new neighborhood was populated with engineers who filled their garages with workbenches and spare electronics parts. Age and appearance didn’t matter to these technological tinkerers, and they welcomed the opportunity to share information and hardware with an eager and inquisitive kid like Steve when he came around to check out their latest projects.

  Conversely, Steve never seemed intimidated by adults despite his youth and inexperience. Once, while working on an electronics project, he realized he was short on parts. Undeterred, he picked up the Palo Alto phone book and cold-called Bill Hewlett, one of the founders of Hewlett-Packard (HP). Bill answered the phone and chatted with Steve affably for a while, then ended up supplying the parts needed to complete Steve’s project. It was a determination and gumption that would become a Steve Jobs hallmark. Once he set his sights on an objective, he would wade right in, go for the top decision maker, and persist relentlessly until he succeeded.

  It was in the garage of Steve’s school buddy and fellow “wirehead” Bill Fernandez where he met Steve Wozniak, the son of an engineer at Lockheed’s Missiles and Space Division in Sunnyvale. Five years Jobs’s senior, “Woz,” as he had been known since grade school, was a brilliant technician and avid prankster who had been kicked out of the University of Colorado after hacking the university’s computer system. By the time he and Jobs met, Woz and Fernandez had already built their own personal computer from surplus parts in Woz’s garage. It was rudimentary at best—a raw circuit board flashing lights in response to user-thrown switches and hardwired logic circuits—but it was a device Woz created on his own a full five years before comparable home hobby computer kits became commercially available. Woz had the technical genius, and Jobs had the vision and hustle. It was an auspicious meeting that would eventually transform their lives, and the world.

  With the end of high school fast approaching, Jobs set his sights on the liberal arts mecca of Reed College in Portland, Oregon. He seemed to embrace the counterculture of the early 1970s—a belief in individuality and a refusal to accept established convention or be intimidated by it. “Steve had a very inquiring mind that was enormously attractive,” remembers Jack Dudman, Reed College’s dean of students at the time. “You wouldn’t get away with bland statements. He refused to accept automatically received truths. He wanted to examine everything himself.”14

  Jobs’s drive applied only to subjects he cared about, however. After only one semester at Reed, he found himself failing out of his core freshman classes. Like Howard Roark, who got himself expelled from architecture school, he found that traditional academics offered no value to his internal vision. So in characteristic Jobs style, he dropped out of school and got a refund of his tuition. Instead of returning home, however, he stayed on campus attending classes of his own choosing for free while living in vacant dorm rooms. One of his most notable classes he audited during this time was calligraphy. It was a fascinating window into functional art that Jobs credits with inspiring the first typefaces for the iconic Macintosh computer he would later invent.

  Back home as a college dropout in the summer of 1974, Steve saw an employment advertisement for video game maker Atari. According to Atari’s chief engineer, Al Alcorn, a human resources rep came to him one day to tell him that some rumpled-looking hippie wouldn’t leave the building until they hired him. Jobs’s sheer force of will and determination brings to mind Howard Roark’s meeting with architect Henry Cameron for his first job. Cameron was known as a mean son of a bitch, but Roark was as fearless with him as Jobs was with Alcorn:

  “I should like to work for you,” Roark said quietly. The voice said “I should like to work for you.” The tone of the voice said “I’m going to work for you.”

  “I don’t know why I hired him,” remembers Alcorn, “except that he was determined to have the job and there was some spark. I really saw the spark in that man, some inner energy, and attitude that he was going to get it done. And he had a vision, too. You know, the definition of a visionary is ‘someone with an inner vision not supported by external facts.’ He had those great ideas without much to back them up. Except that he believed in them.”15

  At Atari, Jobs would work nights on a variety of projects and was a quick study. When a problem came up in Germany, Alcorn gave Jobs a quick primer and sent him there. Jobs solved the problem in Germany in two hours and then made his way to India for a prenegotiated spiritual sabbatical of sorts.

  Jobs was still exploring, trying to find some hidden truth or resolve some inner conflict born of his adopted heritage or unique brand of intellect. After tramping around the subcontinent, contracting scabies, lice, and dysentery, he found the experience more raw and disturbing than enlightening. “It was one of the first times that I started to realize that maybe Thomas Edison did a lot more to improve the world than Karl Marx and Neem Kairolie Baba put together,” Jobs recalls.16

  Back at Atari, Jobs returned to the business of computer electronics with renewed vigor. Even now, it was apparent that he was technically astute, but no engineering genius. His value lay in his creative vision and his persistence. Around Steve, it seemed anything was possible. It was a trait some employees would refer to as the Jobs “reality distortion field.”17 When asked to estimate the time required for him to complete a project, Jobs would quote a schedule of days and weeks instead of months and years. It was an intensity of work focus he would carry for the rest of his career.

  He also renewed his friendship with Woz, who was then working at Hewlett-Packard. Jobs would sneak Woz in at night to work on projects for him in return for free playtime on the latest Atari video games. In one 48-hour stretch, Woz designed the game Break-Out with unprecedented economy, using a surprisingly small number of chips. Jobs paid Woz a fraction of the commission for doing essentially all of the work. Some critics would later claim this as typical of his approach to business: taking credit for others’ creations. Yet it’s a bit like confusing the architect with the bricklayer. One creates the vision, while the other solves problems to fit the vision. Without the driving force of the uncompromising visionary—imagining the project to begin with, then harnessing the resources and securing the deals—no nascent idea would see the commercial light of day.

  Howard Roark explains it perfectly: “An architect uses steel, glass, concrete, produced by others. But the materials remain just so much steel, glass and concrete until he touches them. What he does with them is his individual product and his individual property. This is the only pattern for proper co-operation among men.”

  Stevie Appleseed

  At the time, powerful mainframe computers were still the exclusive domain of governments, universities, and large corporations. Usage time was so precious it had to be purchased by the hour. But with the increasing availability of electronic components and know-how, hobbyists began tinkering like early ham radio operators. In 1975 a group of local enthusiasts formed the Homebrew Club to split the cost of pricey computer kits, share information, and collaborate on ideas. With his acumen in acquiring components, his father’s lessons in deal making, and Wozniak’s brilliant engineering talent, Jobs was eager to play the next business angle and profit from the emerging field.

  Woz had just developed a prototype computer board with the ability to drive a color television display. Inspired, Jobs saw the commercial potential for an inexpensive home computer that did far more than the rudimentary Altair featured on the cover of Popular Electronics as the first “personal” computer, which did little more than light up a string of bulbs in response to binary arithmetic hand coded into the machine through a series of throw switches. Recognizing the need for a marketing angle, Steve dubbed Woz
’s machine the “Apple” in honor of a hippie apple farm retreat he had visited in Oregon.

  Sensing commercial potential, on April Fools’ Day in 1976 he and Woz incorporated Apple Computer. To buy their first batch of parts, they scraped together $1,500 in part by hawking Woz’s expensive HP calculator and Job’s VW bus.18 Then it was time to hustle, which was what Jobs did best.

  Paul Terrell had recently started the Byte Shop, which would become the first chain of retail computer stores. A frequent attendee at Homebrew Club meetings, Terrell was in search of new products to stock his fledgling store shelves. Impressed with Woz’s creation during a Homebrew demo, he arranged for Jobs to supply 50 fully assembled computer boards at $500 a pop. Despite his young age and apparent lack of credentials, Jobs managed to cajole a local parts supplier into extending him a 30-day line of credit after the supplier confirmed the order with Terrell. Scruffy youth was no concern in the Valley in those days. Business was business.

  Terrell commissioned a local cabinetmaker to build a wooden case to house the board for display purposes. An early print ad touts the Apple-I as “The First Low Cost Microcomputer System with a Video Terminal and 8k Bytes of Ram on a Single PC Card.” Selling at a retail price of $666.66, the headline benefits read, “You Don’t Need an Expensive Teletype” and “No More Switches, No More Lights.”19 By the end of the year, the two Steves had delivered 150 Apple-I’s for $75,000 in revenue. They were on their way.

  Over Labor Day weekend Jobs and Woz were offered booth space at the very first national microcomputer show, called Personal Computing 76, in Atlantic City. At the time, it was still anyone’s guess whether the embryonic personal computer could survive in a world dominated by industrial-strength mainframes and hungry corporate giants—and if it did survive, which firms would take the lead. Big names in electronics like Commodore, Texas Instruments, and RadioShack’s parent Tandy were all on the prowl for ways to enter this new market. Among the personal computers displayed were the Altair (running a version of the BASIC computer language coded by Bill Gates at Microsoft—himself an embryonic Randian hero, as we document in Chapter 5, “The Persecuted Titan”) alongside Processor Technology’s Sol, a self-contained unit in a sleek metal case with integrated keyboard. The Apple-I looked like a crude and amateurish cigar box by comparison.

  The show lit a fire in Jobs’s brain as he started to understand the marketing and competitive value of an integrated finished product targeted to a mainstream consumer, versus a collection of components and boards geared toward basement hobbyists. He returned to the workshop with a vision that would leapfrog the competition in function and sizzle. Literally working from their garage, the tiny Apple team created the launching pad for a technological revolution—the Apple II, the first personal computer worthy of the name.

  While Woz completed the functional prototype, Jobs focused on design, marketing, and financing. Jobs demanded that the Apple II’s exterior case look like an integrated KLH stereo—a popular offering at the time among young adults. No detail was too trivial. To reduce ambient noise, he decided to kill the standard cooling fan and “conned”20 Rod Holt from Atari into designing a brand-new kind of power supply by promising him $200 a day, an amount the cash-strapped Jobs was in no position to pay at the time.

  His relentless quest for the perfect new product even penetrated into the innards of his creation that no user would ever see—almost a metaphor for his own personal internal ethic of minimalist utility. In one instance he decreed that every solder connection be done in a precise, attractive straight line that gave the Apple II’s circuit board a surprisingly sharp aesthetic. It’s an extraordinary perspective given the nascent state of the industry born from raw silicon components and homemade kits.

  Such singular focus and intelligence would cause him problems later in his career. Like Howard Roark, Jobs’s uncompromising demands—while right and true to his own individualist vision—made him seem arrogant and inflexible to the more collectively minded around him. According to biographer Pilar Quezzaire, “Jobs’ fiery personality and extreme self-confidence tends to leave employees and colleagues fearful as well as awe-struck.”21

  On the business side, he persuaded Frank Burge from ad agency giant Regis McKenna to take Apple’s account by badgering him three or four times a day after repeated rejections—until the major executive bent to the will of the 20-something entrepreneur. Then Jobs recruited retired Intel executive Mike Markkula as chairman to provide additional financing and business experience, after convincing him they could change the world by putting computers into homes and small businesses. In turn, Markkula brought in Mike “Scotty” Scott, an executive at National Semiconductor, as Apple’s president.

  To introduce the Apple II, Markkula spent $5,000 for a flashy booth and front-door position at the West Coast Computer Faire in 1977. Jobs’s custom plastic cases arrived at the last minute with cosmetic flaws and no time to reship, so he put together a crew to sand, scrape, and paint them the night before. On opening day, people crowded the booth unable to believe these small, sleek boxes could be responsible for the color images displayed on the big TV monitor. Jobs had to routinely throw back the booth draping to prove there was no secret mainframe hidden from view. Curious engineers asked to pop the hood and were amazed by Woz’s cutting-edge design that fit an unprecedented 62 chips on a compact motherboard that looked as sleek as its function. Soon they had 300 orders.

  Poisoned Apple

  The next few years were tough on Jobs. The business grew under the professional leadership he himself had recruited, but despite his founder’s status, Markkula and Scott marginalized the youthful Jobs, leaving him with little true authority and the belittling title of vice president of research and development. Longing for a project he could put his imprint on, he envisioned a brand-new computing paradigm, having been inspired by a trip to the secretive Xerox Palo Alto Research Center (PARC).

  In exchange for allowing Xerox to buy 100,000 shares of pre–initial public offering (IPO) Apple, Xerox agreed to open the kimono on some advanced computer research it was conducting. What Jobs saw at PARC changed the face and culture of computing forever. Among the developments were a fully functional prototype computer called the Xerox Star sporting a graphical user interface (GUI), with overlapping “windows,” pictorial icons representing programs or commands, a pointing device for user input—now known as the familiar “mouse”—and a fast, silent laser printer that beautifully rendered on paper what you could see on the screen. While these innovations are commonplace today, in the late 1970s era of command-line prompts, green-screen monitors, complicated keyboard-based hexadecimal machine code inputs, and rattling impact printers, PARC’s technology was breathtaking. Yet within the bureaucracy of Xerox, precisely nothing was being done to develop its commercial potential. Jobs immediately grasped the possibilities and set to work revolutionizing the personal computer he himself had just invented a few scant years earlier.

  The idea was to include every advanced technology and feature he could think of in a compact form that would be so revolutionary it “would put a dent in the universe.”22 Jobs’s brainchild would be known as Lisa, named after the daughter he fathered with a past girlfriend. But the professional computer scientists now filling the ranks at Apple balked at his hubris. Markkula and Scott would soon reorganize the company, pulling Jobs from the Lisa project and handing it over to a cabal of uninspired engineers under even less inspiring leadership. As consolation, Jobs would be given the strictly symbolic title of chairman of the board. Eventually, the Lisa would become an overpriced disaster—the product of design by a mediocre collective, not Jobs’s individual vision. It would leave Jobs with an even greater appreciation of what he did best: inspiring—and infuriating—small groups of extraordinarily talented individuals to create astoundingly original products under seemingly impossible and uncompromising terms.

  Despite Lisa’s false start, by 1980 Apple Computer was on a tear. The biggest kid on th
e PC block, Apple had sold over 250,000 personal computers since 1977. With over 1,000 employees and facilities across the globe, it continued moving nearly 20,000 computers per month and would rack up $300 million in annual sales that fiscal year alone. At a typical hardware cost of $2,500 (or over $6,000 in today’s dollars) Apple computers cost twice as much as competitive offerings from Commodore and Tandy, yet eclipsed their sales volume handily (IBM hadn’t even entered the PC market yet). It is a testament to Jobs’s insistence on usability and sleek design that Apple had tens of thousands of users willingly paying for a premium brand.23 It was a precursor to the business model Apple would employ with the iPod, iPhone, and iPad.

  Apple Computer Corporation went public on December 12, 1980, selling 5 million shares at $22 each, raising $110 million for the company. The offering was oversubscribed even though it wasn’t available in 20 states, including the normally IPO-friendly Massachusetts, because the stock was deemed “too risky” by government regulators.24 At the end of the first trading day, Apple had a market capitalization of over $1.5 billion. The 25-year-old Jobs held over $200 million.

  In early 1981, still sidelined, Steve was casting about for a new idea when he remembered an experimental project envisioned by a computer scientist named Jef Raskin who was working on the fringes of Apple. His concept was to make an all-in-one self-contained computer that presented itself to the customer as an appliance, like a toaster. No add-on components would be required, and the machine would instantly boot up without any arcane commands or cumbersome software to load. He dubbed it the Macintosh.