Becoming Steve Jobs

by Brent Schlender

  On that September morning in 1981, IBM shipped its first personal computer. Steve had always derided Big Blue as a lumbering monstrosity, and truly believed that no discerning buyer would ever prefer a microcomputer from IBM to one made by Apple. Gates, on the other hand, knew this might be the beginning of something big. His MS-DOS operating system software sat on every IBM PC that went out the door, and he had witnessed the speed with which IBM’s Don Estridge and Bill Lowe had steered their PC project around IBM’s hidebound bureaucracy. In fact, their rush to market had led them to acquiesce to a historic deal with Gates, allowing him the right in the future to license MS-DOS to other computer makers. It was a decision they would forever regret, since it ultimately tilted power from hardware manufacturers to Microsoft—thereby proving the validity of Gates’s manifesto and setting the stage for virtually the entire industry to adopt MS-DOS as a standard that would marginalize Apple, which did not license its operating system. But on that fall afternoon, no one Gates spoke to at Apple seemed aware that their world was about to change, much less acted worried. Years later, Gates remembered that “I kept walking around, asking, ‘Isn’t this a big deal?’ But no one seemed concerned.”

  WITH SCOTTY’S DEPARTURE, Mike Markkula became president and Jobs was elevated to chairman. At a moment when it was about to be blindsided by IBM, and by the series of “clone” computer companies like Compaq that would follow in Big Blue’s wake, Apple was led by two men who didn’t want and weren’t suited for the positions they held. Steve’s reckless immaturity and authority issues had left the company rudderless, and Markkula was an ambivalent leader who did little to give staffers a clear sense of direction. Apple muddled along this way for several months before finally getting serious about the search for a new CEO by hiring Gerry Roche, the chairman of the renowned headhunting firm Heidrick & Struggles, to handle the quest for a new boss. Roche was the man who introduced Steve to John Sculley.

  Steve’s personal courtship of Sculley, then the president of PepsiCo, has been endlessly documented. It’s the story of two men who saw exactly what they wanted to see in the other, who salivated at the thought of how pairing up might transform their lives, and who both wound up sorely disappointed.

  Sculley was a soda pop and snack food executive, a forty-three-year-old native New Yorker who was the product of the best prep school and Ivy League educations that money could buy, graduating from Brown and getting his MBA at Penn’s Wharton School. He made a name for himself at Pepsi designing taste-it-and-rate-it advertising campaigns like the “Pepsi Challenge,” and bringing new innovation to supermarket aisle “endcap” promotions and other cosmetic marketing ploys. He was a great champion of consumer research to determine how best to refine product offerings.

  Despite his dismissive penchant for ignoring Scotty and Markkula, Steve was fully aware that he still had much to learn about the world of business. In Sculley, he thought he had found an open-minded Fortune 500 exec who would be the in-house mentor he thought he wanted and the enlightened, disciplined leader for a company breaking into the big time. As Steve spun tales of Apple’s potential, Sculley seemed full of ideas of how his expertise could fuel Steve’s notion of where the company should go. The fact that he played hard to get only heightened Steve’s infatuation. He turned down Apple’s initial offer of a salary of $300,000 a year, plus options for 500,000 shares of Apple stock, which at the time were worth about $18 million. On March 20, 1982, the two met at the Carlyle Hotel for the signature moment of their courtship. They wandered around Central Park and the Metropolitan Museum of Art before winding up at the San Remo apartment building on Central Park West. A two-story penthouse apartment in one of the building’s distinctive twin towers was vacant and for sale, and Steve had been mulling making an offer to buy it. Standing together on a balcony thirty stories up, Sculley told Steve that before he’d even consider coming to Apple, they’d have to agree to pay him $1 million in salary, plus a $1 million signing bonus, and a guaranteed $1 million severance payment if things didn’t work out. It was a stunning demand for the time, but Steve was undeterred. He said he’d pay it out of his own pocket if necessary.

  He sealed the deal by challenging Sculley with a line that would become a famous part of the Steve Jobs lore: “Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?”

  Two days later CBS founder William S. Paley told Sculley that if he were a young man, he would head for Silicon Valley, because that was where the future was being made. Sculley started work in Cupertino on April 8, 1983. His extravagant salary package made him by far the highest-paid executive the computer industry had ever seen.

  Falling for Sculley would prove to be another regrettable mistake on Steve’s part. In his anxiety to find a big-time manager whose skills would mesh with his, Steve had missed some glaring weaknesses. While Sculley possessed strong, if conventional, marketing skills, he was not well versed in many of the other parts of business, despite his MBA and years at PepsiCo. In his own way, he was every bit as insecure as Steve. He felt he had much to prove to the tech wunderkinds at Apple. He bragged that as a kid he had been a ham radio operator and had invented a color television tube. But he knew little about computers. One of his first hires upon arriving in Cupertino was a technical assistant to help him bone up on digital technology and master the Apple II in his office.

  Smart as he was, Steve made his fair share of bad hires, often after deciding all too quickly that a flashy outsider was stronger than the people who were already working for him. Later the cost of such mistakes would diminish, as he learned how to react quickly when he had to clean up a mess he had made. But the Sculley hire was double trouble. First, Steve did not get the strong mentor he needed, the leader who truly could have furthered his business education. Second, Sculley was a much more skilled practitioner of the dark arts of corporate politics than Steve. It would take time for Steve to realize that Sculley didn’t bring as much to the table as he had hoped. And when Steve did finally come to that realization, he didn’t know how to win the ensuing battle.

  DESPITE THE MANAGEMENT mess at Apple, veterans of those years remember Apple as a company with a unique soul, and cite Steve as a powerful inspiration. The long and winding development of the Macintosh is the saga that best shows why Steve remained so admired even as he was so instrumental in tearing apart the company he loved.

  To understand this, we need to take a step back chronologically, to the fall of 1980, when Scotty dumped Steve from the Lisa team. At the time, he had suggested that Steve take a look at an intriguing side project being run by Jef Raskin, a smart, idiosyncratic, theoretically inclined former college professor whose first job at Apple had been to supervise the preparation of user manuals and product documentation for the Apple II. Steve thought Raskin was a pedantic egghead, but he was intrigued by the goal of his project: to create a consumer-oriented “computer appliance” that would sell for just $1,000. Raskin planned to call his machine the Macintosh.

  Once Steve had decided that he wanted the Mac as his own sandbox, he made quick work of Raskin. He repeatedly and publicly contradicted and undermined Raskin, asking his engineers to tackle projects that didn’t relate to the project’s stated goals. He made clear that he thought Raskin’s product plan fell far short of what was actually possible. Ultimately, he forced a meeting with Scotty and Raskin in which he made an impassioned plea for outright ownership of the product. Shortly after Scotty’s decision in favor of Steve, Raskin quit in a huff. But before he left he fired off a memo to his bosses that still stands as an angry summary of Steve’s weaknesses. “While Mr. Jobs’s stated positions on management techniques are all quite noble and worthy, in practice he is a dreadful manager.… He is a prime example of a manager who takes the credit for his optimistic schedules and then blames the workers when deadlines are not met,” he wrote, adding that Steve “misses appointments … does not give credit … has favorites … and doesn’t keep pro
mises.”

  All true. And yet Steve was right to dump Raskin. He saw that the self-consciously modest Macintosh Raskin had proposed would fall far short of a real breakthrough. To truly expand the consumer market, a transformative step was required, and that meant finally delivering on the promise of those graphical user interface technologies he had first seen at PARC. Steve was convinced he could do this, and equally convinced that Raskin could not. Steve never really cared if people thought he was selfish or that his elbows were a little too sharp. He was willing to do whatever he felt it took to achieve his goals.

  To that end, Steve also did everything he could to separate “Mac” from “Apple.” He ran the project as a fiefdom that just happened to have access to all the funds of the corporation. He spent a million dollars setting up a new home for the team in a separate building known as Bandley Three, down the road from Apple headquarters. Shortly after they moved in, a programmer named Steve Capps hoisted a skull-and-crossbones flag over the building. It became a rallying point for the team—although the rest of the company, of course, took it as a clear sign that Steve was in it for Mac, not for Apple. Again, this was true insofar as it went. But the Lisa would soon prove to be as big a dud as the Apple III, and the Apple II would come under growing pressure from Big Blue’s successful entrant in the market—the IBM PC. Apple needed a breakthrough product. And this time around, Steve would succeed brilliantly in leading the company’s talented engineers to heights they never imagined they could reach.

  Raskin had opted for a cheap and anemic Motorola 6809e microprocessor chip, which would not have had the processing horsepower to employ a mouse or to create screen resolution high enough to support bitmapped graphics. Playing to the competitive instincts of hardware engineer Burrell Smith, a twenty-four-year-old savant with technical chops that rivaled those of Woz, Steve challenged him to build a prototype of the machine that instead incorporated the Lisa’s much more powerful chip—the Motorola 68000—without dramatically raising the overall cost of the machine. It was a daunting goal: you could buy twenty 6809e chips for the price of one 68000.

  Smith, like Woz, could never say no to an engineering challenge. His central breakthrough was to find a way to multiply the flow of digital data from the 68000 processor through the rest of the circuit architecture, a trick that ingeniously allowed the computer to take full advantage of the increased processing power without requiring more support chips or circuits. The result: detailed and responsive graphics, exactly what was essential for a machine that employed a mouse and made bitmapped images. Smith literally lived in his lab for a month, while others in the company took off for the Thanksgiving and Christmas holidays. He didn’t even stop to celebrate his twenty-fifth birthday on December 19. But he accomplished the impossible.

  Egging on Burrell Smith was just the beginning. The Mac project was an expanded version of rallying the gang in the garage, with Steve leading and inspiring a small group of extremely creative people. He stole the best programmers from the Lisa team and other projects around Apple, with a disregard for corporate niceties that was matched only by his boldness. To cite one famous example, when he was unwilling to wait a few days for the extraordinary Andy Hertzfeld to finish up some work on the Apple II, he unplugged Hertzfeld’s computer (wiping out his code in the process) and drove him and his computer over to the building where the Mac team was working. Personality traits that failed him elsewhere worked here. As always, he could be more temperamental than his subordinates, but with this group of artiste engineers he was afforded considerable leeway. “If you could take Steve, he made you up your game,” says Lee Clow. “People who were too thin-skinned to deal with his abusive approach to demanding what he wanted walked away. But I want to prove to guys like that that I can do it. I’m the kind of person who steps up.” So were many of the other stars on the Mac team.

  Steve led the group on retreats every once in a while, which gave him occasion to have the team all to himself, separate from the distractions of the rest of Apple. He was an inspirational speaker. “The work fifty people are doing here,” he told them, “is going to send a giant ripple through the universe.” His language changed over the months as the project, predictably, took longer than he had expected. “The journey is the reward” and “It would be better to miss rather than turn out the wrong thing” gave way to “Real artists ship.” But the phrasing always gave his team the sense that he did indeed see them as artists, as creative innovators. “He was so protective of us,” one of them told Fortune, “that whenever we complained about somebody outside the division, it was like unleashing a Doberman. Steve would get on the telephone and chew the guy out so fast your head would spin.”

  The best of them felt truly empowered and gained Steve’s respect by challenging him directly, using facts, ability, and persistence to change his mind. Sometimes they would simply ignore him outright. One of the Mac hardware engineers, Bob Belleville, worked with Sony to develop a new, much smaller disk drive for the Mac, despite being ordered directly by Steve to not do so. In the end, Sony’s disk drive made it into the Mac and prevented a potentially disastrous delay. Jobs applauded Belleville for sticking it out on his own.

  “You read the books and you wonder, ‘As difficult as he is, why would anyone ever work for him?’ ” says Susan Barnes, the general manager on the Mac project. A no-nonsense financial whiz with a soothing way of managing both above and below her level, Barnes has a quiet, measured intensity that acted like a gyroscope for Steve. She may have been physically small and unassuming, but she commanded respect. “If you’ve worked enough, you know the difference between a boss who just gets it and someone you have to drag into understanding what you’re trying to do. And when you find that boss that just gets it, you’re just like, ‘Oh my God, it’s wonderful. You’re making my life so easy now.’ Steve was that kind of person. He was intellectually right up there with you. You didn’t really have to go into too many explanations. He cared passionately. And he never dialed it in.”

  Over two years, the team performed heroic work. Steve drove them as relentlessly as he drove himself. He reminded them that the fate of the company hinged on their work. He harangued them for failing to meet deadlines and for falling short of perfection. The pressure grew steadily over time. It was taxing on both mind and body, and some members burned out so completely that they were never able to work in the high-tech industry again. Others found the experience exhilarating, but not something they’d want to repeat, and left Apple to find a less stressful employment environment. And then there was the small group of folks who loved it so much they stuck around, ready to do whatever it would take all over again, in order to work in the rarefied, exhilarating, and charged atmosphere that Steve created when he was running the show. When the job was over, Steve had the signatures of the forty-six key players on the team engraved on the inside of every Mac. Even people working on the Apple II found Steve’s performance inspiring. “We used to say that the Mac people had God on their side,” said one only half jokingly.

  THE DEBUT OF the Macintosh established Steve as a master showman. Between the famous “1984” ad, which played just once, during the Super Bowl broadcast on January 22, 1984, and the Mac’s official presentation at the Flint Auditorium on the campus of Cupertino’s De Anza College on January 24, 1984, Steve transformed expectations of what a product introduction could be. “Steve was P. T. Barnum incarnate,” says Lee Clow, a plain-spoken man who sports a wizardly beard and sprangly white hair. “He loved the ta-da! He was always like, ‘I want you to see the Smallest Man in the World!’ He loved pulling the black velvet cloth off a new product, everything about the showbiz, the marketing, the communications.”

  Working with a team of marketers and PR execs, Steve would rehearse endlessly and fastidiously. Bill Gates made appearances at a couple of these events, and remembers being backstage with Steve. “I was never in his league,” he remembers, talking about Steve’s presentations. “I mean, it was just amazing t
o see how precisely he would rehearse. And if he’s about to go onstage, and his support people don’t have the things right, you know, he is really, really tough on them. He’s even a bit nervous because it’s a big performance. But then he’s on, and it’s quite an amazing thing.

  “I mean, his whole thing of knowing exactly what he’s going to say, but up on stage saying it in such a way that he is trying to make you think he’s thinking it up right then …” Gates just laughs.

  Making the “1984” ad with Steve was a pirate enterprise for creative director Clow, art director Brenton Thomas, and Steve Hayden, who wrote the copy. Steve didn’t let the board see the ad until a couple of days before the Super Bowl, and they were horrified. Directed by Blade Runner’s Ridley Scott, the sixty-second spot features a lone woman, in color, running through a sea of gray men and women listening obediently to a huge talking head nattering threateningly from an enormous screen about the enlightened potential of absolute conformity. As the ad nears its end, the woman hurls the large hammer she’s been carrying and smashes the screen. A simple line follows: “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like ‘1984.’ ” Sculley got cold feet and told ChiatDay to sell off the expensive Super Bowl ad space it had purchased. The agency unloaded a thirty-second spot, but lied to Sculley and told him they couldn’t sell the longer one. Marketing chief Bill Campbell decided to air the ad despite the worries of Sculley and the board. Hayden, who was as talented in his own right as Clow, later drew a cartoon that summed up his feelings about Sculley. According to Clow, it showed the CEO and Jobs walking together through a park. Steve is telling Sculley, “Ya know, I think technology can make the human race better.” The thought bubble above Sculley’s head reads, “I’m gonna win over the board. This kid’s gonna be out of here within six months.”