The apostolic high-tech renegades from Apple—Rich Page, a hardware engineer and Apple fellow; Bud Tribble, a leading software programmer; George Crow, another hardware specialist; Dan’l Lewin, who had led Apple’s efforts to sell Macs to universities and colleges; and Susan Barnes, the Mac financial manager—converged here with their rock-star leader every few days to plot the next revolution. From the very start, the world was peeking in through the windows. For the Newsweek cover story on Steve’s departure from Apple, the magazine photographed the six of them outside his house, awkwardly sitting on the lawn in their “business” clothes. (Dan’l Lewin, the chiseled Princeton grad who would lead the sales team, was even wearing a tie.) “It’s hard to think that a $2 billion company with 4,300 employees couldn’t compete with six people in blue jeans,” Steve told the reporter. His humility, of course, was utterly disingenuous.
When he resigned, Steve had told the Apple board that his new company, dubbed NeXT, would not attack any important Apple markets. That was nonsense. His stated target—the higher education market—was in fact very important to Apple, and he had stolen away Lewin, the company’s key sales link to the academic world. But Steve had his eyes on even more than that one narrow slice of Apple’s potential market. As Steve saw things, he had created the first two signature moments of the personal computing era: the Apple II and the Mac. (There had, of course, been another signature moment: the release of the IBM PC in 1981. But Steve discounted that milestone, since he couldn’t imagine a world in which most people would choose to buy machines that were so much harder to use than the ones he created.) Now it was time for a third shift, and he naturally would be the one to drive the change. He would show those bureaucrats who had mismanaged Apple a thing or two about real leadership and innovation.
Steve believed that he now had everything he needed to succeed as a world-class CEO. He had been involved in every aspect of Apple’s business over the previous eight years. He was a quick study, a savant who could envision revolutionary products and inspire the close group of folks who designed and made them, and he was an instinctive marketer. In Steve’s eyes, no one could say the same for Sculley and his “market-driven” tactics. “I think the question everyone is asking about Apple is this,” Steve told me during one of our first interviews. “Does the environment to create the next Macintosh still exist at Apple? Would they know it if they found it?” His new company, called NeXT, would surely grow to be even bigger than Apple, for the sole reason that he had higher expectations for it. “The world doesn’t need another $100 million computing company,” he announced, scoffing at the thought that he might produce something so trivial.
He was convinced that he really was the only person who could create from scratch the amazing blockbuster products that would give rise to the industry’s next great company. So were his renegades. “I had had plenty of experience with the downside of Steve,” remembers Lewin, the last of the five Apple exiles to sign up. “I definitely thought about the risk of going to work for him and leaving my job at Apple. But I worried that if I didn’t go to NeXT, I would have always said, ‘Dammit, I should have gone along for the ride.’ ” Says another early staffer, who signed on in 1986: “You would have had to be an idiot not to believe that Steve was going to create the next big thing. Everyone believed that.”
Little did they know that in due time, NeXT would turn out to be the full, unfortunate blooming of Steve Jobs’s worst tendencies at Apple. Yes, Steve had been a product visionary and a great spokesman for the company and the industry he had helped create. But he was hardly poised to be a great chief executive. In many ways, he wasn’t even a grown-up yet.
At the very moment when Steve had convinced himself that he had won a richly deserved freedom from an oppressive, dull overseer, he was in fact slave to so much else: to his celebrity, to his unbalanced and obsessive desire for perfection in the most innocuous of details, to his managerial flightiness and imperiousness, to his shortcomings as an analyst of his own industry, to his burning need for revenge, and to his own blindness to these faults. He was immature and adolescent in so many ways—egocentric, unrealistically idealistic, and unable to manage the ups and downs of real relationships.
Steve was too self-centered to see how much of Apple’s success had depended upon a combination of perfect timing and the work of others. Nor did he recognize how much he had contributed to its many problems. He didn’t realize how little he had truly absorbed from his crash course in business. Steve had been the titular CEO of Apple for only a few brief months at its inception, before Mike Scott was hired, and actually knew quite little of the true demands of corporate leadership. He was smart enough to realize that a successful CEO must prioritize among his employees’ many projects and ideas, but it would take years for him to learn how to do so efficiently or without the ego that came with thinking that his own ideas were always best. Nor did he have any real knowledge of how to launch a company into a field crawling with competitors. And he was unaware of each and every one of these weaknesses.
One afternoon that fall, the wind kicked up outside the Woodside house during an early meeting. “The doors were slamming,” remembers Barnes, who served as NeXT’s CFO, “just opening and shutting, opening and shutting in the wind. It was driving Steve crazy. And I could see, there was a piece of him that wanted to turn on one of us and just take us out. But it was his house. I wasn’t in charge of facilities, like I was at Apple! So, hey dude, it’s your house, you’re the one who’s got the door-slamming problem, not me.” Jobs, it seemed to Barnes, had no clue about the hundreds of little things other people had been doing over the years to keep Apple afloat while he was dreaming up his big ideas. Now he had to learn. “When you’re the CEO and the funder,” she says, recalling that afternoon, “everything’s on your shoulders.”
UNLIKE IN 1975, when he and Woz had pioneered the personal computing industry, in 1986 Steve was trying to enter a hypercompetitive marketplace with such a wide range of offerings that any newcomer would be hard-pressed to offer anything truly unique. Computer technology, drafting on the amazing multiplicative power of Moore’s law, had made tremendous strides in a decade. Nineteen eighty-five was the year that semiconductor makers like Intel and NEC first boasted of cramming a million transistors on a single memory chip. (Of course, that pales next to today’s highest-capacity chips, which can hold 128 trillion discrete elements.) But that wasn’t the only technology that had improved so swiftly. Hard disk drives were finally cheap enough for consumers to afford: If you shopped around, you could find one that held 10 megabytes of digital storage for about $700. Back then that was enough space to hold all the essential software and applications you used for quick access and then some. (To give a sense of comparison, today, $700 will buy you 10 terabytes of storage, or roughly 100,000 times as much capacity—room enough to stockpile more than a thousand high-definition movies.)
As a result, the performance and capacity of reasonably priced microcomputers were improving by leaps and bounds, and would continue to do so in the foreseeable future. Steve understood this, and thought it was possible to find a perfect niche for his perfect new machine, right between the personal computer and a new category of desktop systems that had come to be called engineering workstations.
The “workstation” segment of microcomputers emerged in the early 1980s, around the time that Apple was working on the Lisa and IBM was gearing up to introduce its machines. Workstations were basically PCs beefed up with more memory, more data storage, faster processors, and, most visibly, gigantic, twenty-four-inch screens. They emerged mainly from computer science departments in academia and were designed to put as much raw processing power as possible in the hands of a single user—most likely an engineer or scientist whose institution could afford the machine, and who could write his or her own applications to perform heavy-duty calculations or mathematical models. Workstations had two other attributes that really made them stand apart. First, they were designed from
the ground up to participate in networks with other workstations. Second, they employed the most advanced microcomputer software operating system of the time, which had been originally developed by computer scientists at AT&T’s Bell Laboratories, and then nurtured and improved by academic researchers and scientists in national laboratories. Called Unix, it was the operating system that enabled the first data “network of networks,” which later came to be called the Internet.
Sun Microsystems, a Silicon Valley workstation maker, got its start in 1982 making such machines for use on the Stanford University Network (hence its name). Sun set a record that still stands in the annals of American business for being the company that from a dead start reached the $1 billion sales mark faster than any other manufacturer—it took all of four years. In fact, Sun was nearing that heady milestone the year that Steve’s new venture opened for business. Sun was a no-nonsense company. Its powerful computers had no special flourishes other than their outstanding performance benchmarks. They delivered great bang for the buck, but their lack of aesthetics offended Steve; instead of seeing the utility of such computers, he saw only opportunity—of course, he assumed, the world would be partial to something easier to use and more attractive.
Meanwhile, personal computers sold by IBM, and by the growing number of “clone” manufacturers like Compaq and others, were perfectly serviceable machines for the thousands of businesses starting to make rudimentary computing a standard part of their office workflow. The workplace was a fast-growing market, with ferocious competitors serving business customers who focused on price, productivity, and return on investment. A startup out to make its mark would have to come up with a computer that stood out from the rest, that gave schools, businesses, or consumers something they really couldn’t find anywhere else.
Given this fierce competition, it’s easy to understand why Sculley and the Apple board sued Steve. With IBM and the makers of other MS-DOS-based clones dominating the market for PCs sold to corporations, Apple needed the school and university market more than ever. Workstations were quickly becoming the lab benches for many disciplines at research universities and in corporate R&D skunkworks. It was only natural that Apple would want to offer its own unique approach to these machines as well. Apple’s suit stalled Steve’s effort to move quickly, by making it difficult for NeXT to do basic things like arrange deals with suppliers, incorporate, hire employees, and so on.
But Apple withdrew its legal challenge in January 1986, in part because Sculley finally decided he didn’t have the stomach for the public relations fallout of a court suit against a popular public figure. In the meantime, Jobs had been able to use the fall of 1985 to study the education market. He, Lewin, and some of the other founders made several trips to universities to hear what professors and researchers really wanted. The founders would remember these treks as fondly as they would the gatherings at the Jackling house. Funded by Steve, who could still be a tightwad, the early employees operated on the cheap, with “that startup hustle,” as Steve put it. “We didn’t have a lot of money,” Bud Tribble told me. “All six of us would squeeze into a single rental car to go make our visits. We even shared hotel rooms. We developed a real pioneer spirit.” For a couple of months, NeXT had the feeling of a true startup. And the road crew actually learned something promising: academics truly did want all the power in those $20,000 workstations. But the crew also learned what the company’s challenge would be: academics absolutely could not spend more than $3,000 per machine. As he had done at Apple, Lewin created a consortium of schools to serve as consultants—and as pilot customers for the NeXT computer. It wasn’t just the allure of signing on with the great Steve Jobs that appealed to the university presidents; it was the fact that the great Steve Jobs had promised that he could indeed deliver the machine they craved for a mere $3,000. It was a promise he wouldn’t come close to keeping.
LATER IN HIS LIFE, Steve would become more adept at managing the press than any other businessman alive. But as he entered his thirties, his idea of good PR was to get attention of any kind. Launching NeXT, Jobs felt that some initial publicity would help attract the investors he needed to build this new and better version of Apple. So he opened the doors for two prestigious media outlets, Esquire magazine and PBS. The results were fascinating: a portrait of a young entrepreneur trying on the clothes of a seasoned businessman, and not quite filling them out.
Steve’s segment of a PBS show called The Entrepreneurs kicked off with an image of him pulling carrots from garden soil. He did occasionally garden, and he may have intended the image as confirmation of his counterculture roots, but the shot lent an almost laughably gauzy warmth to the introduction, setting the stage for a piece that revealed far more about him than he can have intended. The episode consisted mostly of film clips from the company’s first two off-site meetings—intense getaways that were one part group therapy brainstorming, and one part endurance test. Everyone involved in the production wanted to tell the tale of a heroic young entrepreneur, and the voiceover obligingly delivered, describing the show as a chance to see Jobs “at his lucid best, as a company builder and a motivator.” But the language didn’t match the actual footage from the retreats, which made clear just how hard it would be for Jobs to bring NeXT into focus.
The two off-sites were at Pebble Beach, California, the first in December 1985 and the second in March 1986. They were designed for Jobs and his small staff to define their grand project and to assign clear responsibility for the various strands of its development. Footage from the December meeting shows Jobs at the whiteboard trying to get the group to agree on their top priority: Was it more important to meet the $3,000 price target, create a machine loaded with great technology, or deliver that computer by the spring of 1987? As with any startup, different factions advanced their own agendas; Rich Page claimed that the company was pointless if its computer wasn’t a radical technological advance. Dan’l Lewin, the head of sales and marketing, explained that since schools purchased computers during the summer, missing the target date would mean missing a year of revenue. George Crow, another hardware whiz, argued that price was paramount. As always, Jobs was charismatic and confident and clearly aware of when the cameras were rolling. His sentiments were touching, his heart seemed in the right place, and his bold words were inspiring. “More important than building a product, we are in the process of architecting a company that will hopefully be much more incredible, the total will be much more incredible than the sum of its parts,” he said. “The cumulative effort of approximately twenty thousand decisions that we’re all going to make over the next two years are going to define what our company is. And one of the things that made Apple great was that, in the early days, it was built from the heart.” But not surprising for a CEO emphasizing the importance of “twenty thousand decisions,” he made little progress in steering the group toward consensus. His one clear conclusion—“The delivery date is a line in the sand”—registered as what it turned out to be: an unattainable fiat. His team seemed smart, passionate, and intelligent; but it also seemed young, naïve, unfocused, and in desperate need of a leader more decisive than Steve.
As they pontificated, deliberated, and pointed fingers, especially during one fraught March discussion on cost cutting, the group made apparent how absurd it was to think that they could actually deliver a great computer in fifteen months. For years, Jobs had been criticized by Scott, Sculley, Markkula, Woz, and others as being a divisive and impulsive manager who sowed chaos unnecessarily, delivered products late, gave unclear and shifting directions, and advanced his own ideas at the expense of the corporation. The squabbling was a clear harbinger that similar troubles awaited the NeXT crew.
For the Esquire piece, which was published in December 1986, Steve invited the writer Joe Nocera to spend a week at the company. Nocera (now an op-ed columnist at the New York Times) attended planning meetings and strategy sessions at the company’s new offices in the Stanford Research Park in Palo Alto (the same bu
ilding I visited when I met Steve for the first time), where he spoke with a wide range of staffers. He dined with Jobs and visited him at home—activities that would be strictly off-limits to most journalists later in Jobs’s career. As always, Steve had a point he wanted to make, in this case that NeXT was “going to take the technology to the next level,” as he told Nocera. Getting there would mean re-creating the intensity and passion that he had loved during the development of the Mac. “I remember many late nights coming out of the Mac building, when I would have the most incredibly powerful feelings about my life,” Jobs said. “Just exhilarating feelings about my life. I feel some of that now with NeXT. I can’t explain it. I don’t really understand it. But I’m comfortable with it.”
Steve’s strong feelings about Apple rippled through the story, so much so that Nocera called Jobs’s assertion that he had put Apple behind him “wishful thinking.” “Apple,” Jobs admitted, “is like an intense love affair with a girl you really, really like, and then she decides to drop you and go out with someone who’s not so neat.” The story even dipped into Steve’s relationship with his girlfriend at the time, Tina Redse, describing how Steve wrote her a long note apologizing for working late one night. Nocera found his single-mindedness lonely. Jobs, who at one point in the article failed to remember if he had curtains in his house, refused to acknowledge feeling any kind of wistfulness or dissatisfaction.
Becoming Steve Jobs Page 11