Becoming Steve Jobs

by Brent Schlender

  It wasn’t much of a business, but it was enough for two young men who were coming to believe that these microcomputers could change everything. “We felt it was going to affect every home in the country,” Woz explained years later. “But we felt it for the wrong reasons. We felt that everybody was technical enough to really use it and write their own programs and solve their problems that way.” Steve decided that their new company should be called Apple. There are different tales about the origin of the name, but it was a brilliant decision. Years later, Lee Clow, Steve’s longtime collaborator on Apple’s distinctive brand of advertising, told me, “I honestly believe that his intuition was that they were going to change people’s lives by giving them technology they didn’t know they needed, that would be different from anything they knew. So they needed something friendly and approachable and likable. He took a page out of Sony’s book, because Sony was originally called Tokyo Telecommunications Engineering Corporation, and [cofounder] Akio Morita said they needed something much more approachable.”

  Indeed, adopting the name Apple foreshadows the expansiveness and originality Steve would bring to the creation of these new machines. It’s suggestive of so much: the Garden of Eden, and the humanity—both good and bad—resulting from Eve’s bite of the fruit from the Tree of Knowledge; Johnny Appleseed, the great sower of plentitude from American myth; the Beatles and their own record label, a connection that would lead to litigation years later; Isaac Newton, the plummeting apple, and the spark of an idea; American as apple pie; the legend of William Tell, who saved his own life and that of his son by using his crossbow to pierce an apple perched on the son’s head; wholesomeness, fecundity, and, of course, the natural world. Apple is not a word for geeks, unlike Asus, Compaq, Control Data, Data General, DEC, IBM, Sperry Rand, Texas Instruments, or Wipro, to mention some less felicitously named computer companies. It hints at a company that would bring, as it eventually did, humanism and creativity to the science and engineering of computers. As Clow suggests, settling on Apple was a great, intuitive decision. Steve was innately comfortable trusting his gut; it’s a characteristic of the best entrepreneurs, a necessity for anyone who wants to make a living developing things no one has ever quite imagined before.

  Of course, Steve’s gut could also betray him, as it did when he fell in love with Apple’s first corporate logo. It was a pen-and-ink drawing, detailed in the way of an etching, of Isaac Newton sitting beneath an apple tree. It was the kind of overworked, precious image that a young calligraphy student might find enchanting, but far too esoteric for a company with big mainstream ambitions. This graphic rendition was drawn by Ronald Wayne, a former Atari engineer whom Steve had recruited to join the team. Wayne would have acted as the wise, elder tiebreaker if Steve and Woz ever came to loggerheads. The three signed a partnership agreement that gave Steve and Woz each 45 percent of the equity, with Wayne taking the remaining 10 percent. But Wayne quickly decided he wasn’t prepared to risk his future on this pair of neophytes. In June 1976, he sold back his stake for $800 to Jobs and Wozniak, who a year later would commission a new logo. In the tradition of Pete Best of the Beatles, Wayne would miss out on the ride of his life.

  SHORTLY AFTER REGISTERING Apple as a California business partnership on April Fools’ Day, 1976, Steve and Woz made one more trip to the Homebrew Computer Club to show off the finished, fully assembled version of their new computer. Woz had met every challenge. On a circuit board measuring 9 inches by 15.5 inches, he had assembled a microprocessor, some dynamic random access memory chips, a central processing unit, a power supply, and other parts in such a way that once you connected it to a keyboard and a monitor, you could do a couple of radically new things: write computer programs on your own machine, in your own home, without being tied into a remote mainframe; and for the first time on a microcomputer, you could type your commands on a keyboard and see them immediately displayed on a black-and-white TV monitor, making them easier to edit than ever before. Both steps were radical departures from past practice. Woz had also written a version of BASIC, the simplest and most important hobbyist programming language, to run on the Motorola 6800 microprocessor that functioned as the brains of what he and Steve were starting to call the Apple 1. Woz didn’t fully appreciate it, but he had created the first truly personal computer. Steve, however, understood the magnitude of the achievement, and the power of the term personal computer in the context of an industry that had historically been anything but personal. So that was exactly the term he used whenever people asked him what it was that Woz had dreamed up.

  The reaction from most club members, however, was tepid. Most were tinkerers who believed that half the fun of computing was in designing and building their own machines. That’s why they called it the Homebrew Computer Club, after all. With an Apple 1, however, all you had to do was set it up, connect it to a keyboard and a monitor, plug it in, and turn it on. Others beefed that Steve was flouting the club’s community spirit and its history of sharing ideas freely by asking them to pay for a prebuilt machine.

  It was Steve’s nature to be out of synch with this kind of groupthink. He was a singular free-thinker whose ideas would often run against the conventional wisdom of any community in which he operated. He and the Homebrewers were cut from different cloth. Their spirited debates often bored him. While a few had broader business ambitions and eventually founded microcomputer companies of their own, most were obsessively focused on electronic intricacies, like determining the most efficient way to link memory chips to microprocessors, or imagining how you might use a cheap computer to play games like the ones they played on mainframes back in school. Steve liked knowing enough to be conversant about electronics and computer design, and later in his life he would boast about his own supposed skill as a programmer. But even in 1975, he didn’t fundamentally or passionately care about the intricacies of computers in and of themselves. Instead, he was obsessed by what might happen when this powerful technology got into the hands of many, many people.

  Through the years, Steve would be the beneficiary of a fair amount of luck, some of it outrageously good, and of course some of it mortally bad. Pixar’s Ed Catmull likes to say that since you can’t control the luck itself, which is bound to come your way for better and for worse, what matters is your state of preparedness to deal with it. Steve had a kind of hyperawareness of his surroundings that allowed him to leap at opportunities that presented themselves. So when Paul Terrell, the owner of the Byte Shop computer store in nearby Mountain View, introduced himself to Steve and Woz after the presentation and let them know he was impressed enough to want to talk about doing some business together, Steve knew exactly what to do. The very next day he borrowed a car and drove over to the Byte Shop, Terrell’s humble little store on El Camino Real, Silicon Valley’s main thoroughfare. Terrell surprised him, saying that if the two Steves could deliver fifty fully assembled circuit boards with all the chips soldered into place by a certain date, he would pay them $500 a pop—in other words, ten times what Steve and Woz had been charging club members for the printed circuit boards alone. Without missing a beat, Steve happily promised delivery, even though he and Woz had neither the wherewithal to buy the components nor anything like the “factory space” or “labor force” necessary to build anything.

  From this point forward, Steve’s opportunism and drive would define the contours of his relationship with Woz. Woz, who was five years older, taught Steve the intrinsic value of great engineering. His accomplishments reinforced Steve’s sense that anything was possible when you had technological genius on your side. But it was Steve’s ability to manipulate Woz that drove the partnership, and not always for the better. Back in 1974, when Atari had been trying to develop a new version of its big hit, Pong, Nolan Bushnell had asked Jobs to create a prototype, offering a considerable bonus if he could reduce the number of chips required for each circuit board. Steve brought Woz in on the project, promising to split the fee. Woz’s design was more economical than B
ushnell had thought was even possible, and so Steve was paid a bonus of $5,000 on top of the base $700 fee. According to Woz, Steve only paid him $350, not the $2,850 he should have earned. Walter Isaacson, Steve’s official biographer, wrote that Jobs denied shortchanging Woz. But the accusation rings true, because it fits with a few other instances in which Steve took shortcuts with people who were close to him.

  Still, like several other close collaborators who later grew disenchanted with Steve, Woz admits that he would never have succeeded so brilliantly without Steve. Terrell’s order for $25,000 worth of computer motherboards was about $25,000 higher than anything Woz imagined he might ever sell.

  The two young men had created a nice little market for their “blue boxes,” but that was trivial compared with this. They had never manufactured multiple units of anything at such a significant scale. They had never formally financed a business. Nor had they ever really sold anything of any real value. None of this dissuaded Jobs. He set about taking care of the details of production. For a makeshift factory, he commandeered a bedroom in his parents’ house. He roped his adoptive sister, Patty, into fitting and soldering the semiconductors and other parts into their marked spaces on the circuit board. When Terrell ordered up another fifty, Steve moved the operation into his parents’ garage after his father cleared out the cars he was fixing up for resale. He hired Bill Fernandez, the very guy who back in high school had first introduced him to Woz. And he brought in other neighborhood kids to accelerate the process. He signed up an answering service and rented a post office box. He did, in other words, whatever it took.

  The garage became home to an assembly line in miniature. In one area, Steve’s sister and some friends soldered chips into place. Woz had his own workspace nearby where he could vet the assembled boards as they were finished. On the other side of the garage they took turns testing the “stuffed” boards for hours under heat lamps to verify their durability. Steve’s mother answered phone calls. Everyone worked nights and weekends. And Steve was more focused than anyone. He prodded the team ceaselessly. When things went wrong, he moved fast; after an old girlfriend failed to solder a few chips correctly, he made her the team’s bookkeeper. His temper was short and he never hesitated to belittle their work when something went wrong. As a child, Steve had rarely been given any reason to hold back his honest feelings. Now he began to learn one of his first management lessons, namely that his temper, properly targeted, could actually be a very effective motivational tool. It was a lesson that would prove hard to undo.

  Sure enough, under Steve’s gimlet eye, his motley team delivered all the circuit boards Terrell ever ordered. The product didn’t exactly fly off the shelf—fewer than two hundred Apple 1’s were ever sold. Even so, that summer in the legendary garage represented the first time Steve rallied a group of people to dig down deep and deliver something that was innovative and miraculous, and that they weren’t even sure they could create. It wouldn’t be the last time he would pull off such a trick. After an aborted stint at college, a picaresque pilgrimage to India, some revelatory travels on LSD, and an internship of sorts at Atari, Steve had discovered his true mission. And now he was totally locked in.

  Chapter 2

  “I Didn’t Want to Be a Businessman”

  The story of Steve Jobs’s first tenure at Apple Computer is the tale of a young visionary in the adolescence of his career. After playing such a crucial role in making and selling the Apple 1, Steve faced the challenge of moving his vision, intelligence, intuition, and ferocious personality from his father’s garage into a much bigger “space”—the corporate and financial and industrial world of Silicon Valley. Steve may have been a quick study, but he didn’t have an instinctive sense of how to do this. Some young men and women are bred for corporate life—Bill Gates comes to mind. Steve was not.

  If Steve was ever going to do something grander than just cook up something cool with the kids in the garage, he had to learn to play with the grown-ups. But it wasn’t going to be easy. As he told me several times: “I didn’t want to be a businessman, because all the businessmen I knew I didn’t want to be like.” Steve’s natural inclination was to position himself as the critic, the rebel, the visionary, the lithe and nimble David against the stodgy Goliath of whatever powers might be. Collaborating with “the Man,” to use the colloquial terminology of his day, wasn’t just problematic, it was tantamount to collusion. Yes, he wanted to play their game, but by his own rules.

  ALMOST AS SOON as the young men had started selling the first batches of Apple 1’s, Woz told Steve that he knew he could design a much better machine. As Woz imagined it, the next model would display its results in full color, pack a lot more power and performance onto the same-size “motherboard,” and have multiple “slots” that could be adapted to help the machine perform more tasks. If Steve and Woz were going to have any chance of producing and selling such a snazzy machine, they would have to scrounge up some serious working capital. They needed far more than they could get by continuing to cadge personal loans from friends, parents, and advance payments from proprietors of hobby shops. Not knowing exactly where he could get that kind of money, Steve began to make a real effort to connect with Silicon Valley’s cloistered world of successful entrepreneurs, marketers, and financiers.

  In 1976, the route to success in Silicon Valley wasn’t remotely as well mapped as it is today, when entrepreneurs can find the path to financing by simply Googling “venture capital.” Back then the Valley had a much smaller mix of lawyers, financiers, and managers, and most business was conducted face-to-face. But Steve had several qualities that made him a superb networker. “I was really lucky to get into computers when it was a very young industry,” he once told me. “At that point in time there weren’t many degrees offered in computer science, so people in computers were from mathematics, physics, music, zoology, whatever. Wherever they came from they loved it, and there were some incredibly brilliant people involved.” He had no qualms about calling anyone up in search of information or help; heck, he’d been doing that since his phone call to Bill Hewlett when he was fourteen years old. Steve had none of the tentativeness most young men or women might have as they set out to learn the nuances of a complicated new world like the venture capital business. He had such faith in the excellence of his work that he assumed someone would eventually agree to fund. He could be genuinely charming when this confidence didn’t lead him into boorishness.

  So he tirelessly navigated the Valley’s network of experts, one phone call and one meeting at time, until he finally found himself connected with Regis McKenna, the marketing whiz who had helped promote Intel, and who would eventually be instrumental in establishing Apple’s iconoclastic, and remarkably resilient, public image.

  Steve and Woz met McKenna at his offices. Steve certainly didn’t dress up for this meeting—as usual, his jeans had holes, his hair was unbrushed, he wore no shoes, and he smelled. At this point in his life, he deemed deodorant, footwear, and the like affectations. McKenna was a unique member of the Silicon Valley elite. Well coiffed, with magnetic blue eyes, he was frank, unforgiving, and ubiquitously networked, and had a sly sense of humor and brash self-confidence that matched Steve’s. His business card simply read: Regis McKenna, Himself. He saw past the boys’ nerdy slovenliness to their remarkable intelligence, and found himself liking them. “Steve had breadth,” McKenna remembers, “and a sort of thoughtful way about him that would always be there.” So he and Nolan Bushnell, Jobs’s old boss at Atari, steered Steve to Don Valentine, a founding partner of Sequoia Capital, one of the first venture capital firms to master the art of early-stage investing in high-tech companies.

  Valentine came from the chip world. He had worked with the founders of Intel before they abandoned Fairchild Semiconductor to open their own shop, and he had once held a senior position at National Semiconductor. He met with the boys only because McKenna was a friend, and quite literally held his nose to hear Steve and Woz out. After their visit,
he called McKenna to ask, “Why’d you send me these renegades from the human race?” Yet he did point the boys toward an individual “angel” investor who would be more apt to work closely with an idiosyncratic startup such as Apple.

  That’s how Steve was introduced to A. C. “Mike” Markkula, who would become, for better and for worse, one of Steve’s two primary early mentors at Apple. One day, Markkula decided to drive his gold Corvette over to the garage and let the boys walk him through the wonders of the Apple 1. A former Intel sales executive who also owned an advanced degree in electrical engineering, he had made a lot of money in a hurry but had “retired” in his early thirties when he was passed over for the company’s top sales job. Rather quiet, Markkula was at heart a computer geek, and could do some programming himself. He immediately grasped the potential in the ambitious ideas of Jobs and Wozniak, and he also could see how intelligent, resourceful, and yet malleable they were. After a few meetings he bought in, driving a pretty hard bargain. In one of the greatest angel investments of all time, Markkula ponied up $92,000 out of his own pocket and arranged for a $250,000 line of credit with Bank of America, in return for a one-third stake in Apple.

  Markkula insisted that Woz, who was still working at Hewlett-Packard, become a full-time Apple employee. Woz loved working at HP, but he also really did want to create another great microcomputer. So he made one last presentation to HP, to give them a final shot to develop his still rough concept for the Apple II. They weren’t interested. “Big experienced companies and investors, analysts—those kinds of people, that are trained in business and much smarter than we were—they didn’t think that this was going to be a real big market,” Woz remembered. “They thought it was going to be a little hobby thing, like home robots or ham radios, that a few techie people would get into.” So he quit his job and signed on.