Apple did bring a stick to the negotiations. The company had a long-standing patent suit against Microsoft alleging that Windows, which largely replicated the conventions of the Mac’s graphical user interface, infringed on Apple’s own intellectual property. Many observers thought Apple had a good case, and Gates really wanted it settled. But Amelio had insisted on a variety of ancillary agreements and never could close the deal.
When Steve called on Gates, he kept things simple. He explained that he would be willing to drop the patent litigation, but for a price. Not only did he want Microsoft to publicly announce a five-year commitment to provide Office for the Mac; he also wanted his powerful rival to publicly, and financially, make clear that this was an endorsement of Apple’s new direction by purchasing $150 million in nonvoting shares. In other words, Steve wasn’t asking for a loan, he was asking Bill to put his money where his mouth was.
“It was classic,” remembers Gates. “I’d been negotiating this deal with Amelio, and Gil wanted six things, most of which were not important. Gil was complicated, and I’d be calling him on the phone, faxing him stuff over the holidays. And then when Steve comes in, he looks at the deal and says, ‘Here are the two things I want, and here’s what you clearly want from us.’ And we had that deal done very quickly.”
The deal closed at quite literally the eleventh hour of the night before Steve gave his MacWorld keynote address in a downtown Boston theater called the Castle. By Steve’s standards, this speech was on the short side, clocking in at just about thirty minutes. He had no products to introduce or demo. Instead, he presented the corporate equivalent of a State of the Union address. Pacing the stage like a caged tiger, Steve was visibly tense. He wore a white, long-sleeved T-shirt underneath a black sweater vest that was buttoned up in a lopsided way—the lowest button didn’t have a free buttonhole, so one side of the vest hung lower than the other. A couple of times he had trouble getting the remote control to advance the slides projected on the enormous screen behind him. But once he got rolling, his presentation was one of his most concise, and a clear signal that things would change—for the better—at Apple.
Much of his talk was more of a lecture than a presentation, in which he outlined his thinking about what it would take to bring Apple back. He dismissed some of the popular criticisms of Apple, namely that its technology wasn’t relevant, that it couldn’t execute well, and that the company was so disorganized that it couldn’t be managed. “Apple is executing wonderfully well, just on the wrong things,” he quipped. The reason the company seemed in such disarray was that it hadn’t had any real leadership for years. The biggest immediate problem, he added, was that the company’s sales were shrinking. To address that, Apple would need to sharpen its market focus, reassert its brand, and shore up partnerships. “And the place to start is at the top.” That’s when he introduced the new board, describing the strengths of each new director and only then mentioning that he too would join it. He said there would be no chairman named until a new, permanent CEO was hired.
After about twenty minutes he turned to partnerships. What he really wanted to talk about was one business relationship—the one with Microsoft. His first mention of Bill Gates’s company drew only tepid applause, and a few hoots. But in short order, he laid out a five-point deal that would prove to the world that “Microsoft will be part of the game with us,” and later adding that “we have to let go of … this notion that for Apple to win, Microsoft must lose.” Once it all sank in, however, the crowd warmed to the idea, booing only at the mention of Internet Explorer becoming the default browser on future Macs. When Steve introduced Bill, who appeared via a live video feed from Seattle, the audience forced the Microsoft CEO to wait while it applauded before he could make his short statement.
The moment turned out to be Steve’s worst case of stage management ever. Bill’s face, with his familiar smile that can border on a smirk, was about six feet tall on the massive screen above and behind Steve. He looked down on Steve as if to say, “I’m sorry, little people, while I enjoy gracing you with my presence, I can’t be bothered to fly down to your little campfire singalong.” The comparisons with Apple’s old “Big Brother” ad were inevitable.
Overlooked in the ensuing news coverage was the quiet unveiling at the end of the show of a new slogan. One of the themes Steve came back to at several points in the program was how important it can be to try to look at things from another perspective, just to test your assumptions. In other words, he was urging people to “Think Different.” Ads sporting that tagline wouldn’t appear for another few months. But Steve was already sold on the concept as a rallying cry for the new Apple. In fact, he also was already sold on coming back to Apple full-time.
“I watched Bob Dylan as I was growing up, and I watched him never stand still,” Steve would tell me about a year later, in a circuitous attempt to explain why he finally dived back into Apple. “If you look at true artists, if they get really good at something, it occurs to them that they can do this for the rest of their lives, and they can be really successful at it to the outside world, but not really successful to themselves. That’s the moment that an artist really decides who he or she is. If they keep on risking failure they’re still artists. Dylan and Picasso were always risking failure.
“This Apple thing is that way for me. I don’t want to fail, of course. When I was going in I didn’t know how bad it really was, but I still had a lot to think about. I had to consider the implications for Pixar, and for my family, and for my reputation, and all sorts of things. And I finally decided, I don’t really care, this is what I want to do. And if I try my best and fail, well, I tried my best.”
Steve waited till September to announce that he would formally take the reins. Even then, he agreed only to become Apple’s “interim” CEO, or iCEO, as he liked to say, because he still was unsure where the gig would take him. “It was amazing,” remembers Gates. “NeXT the hardware company disappears. NeXT the software company is going absolutely nowhere. But then the Apple board of directors hands the keys over to Steve, even as they’re all thinking, ‘It’s too bad all the normal ways of saving a company didn’t work. Holy smokes, what are we doing here? This is our only chance, but whoa! Here we go!’ ”
Chapter 9
Maybe They Had to Be Crazy
At a trade conference on October 6, 1997, exactly three weeks after Steve announced that he was taking on the title of iCEO, Michael Dell, the billionaire founder of his eponymous build-to-order PC clone business, was asked what he would do if he were put in charge of Apple Computer. “What would I do?” brayed the CEO, who was a decade younger than Steve. “I’d shut it down and give the money back to shareholders.” Steve shot back an email: “CEOs are supposed to have class,” he wrote. But just a year and a half earlier he had told me pretty much the same thing: “Apple ain’t worth anything like the price of its stock,” he’d said.
Dell’s flippant suggestion was not just a reflection of conventional wisdom—it also sounded like a much safer idea than putting the company in the hands of Steve Jobs. There was no evidence to suggest that someone with Steve’s record had the chops to turn around a mess as daunting as Apple. He had shown himself to be erratic, undisciplined, and petulant. He had only succeeded when leading small groups of people; Apple had thousands of employees scattered from Cupertino to Ireland to Singapore. He had been a prima donna and a spendthrift, but this job seemed to call for a cold-blooded CEO who understood the value of patience, discipline, and cutting costs in a hurry. Perhaps Steve was a genius—the success of Pixar seemed to reinforce that. Perhaps he was an opportunist—selling NeXT to Apple seemed to bear that out. But a great CEO? A proper leader? The world could be forgiven its skepticism.
Yet here in the fall of 1997, facing a corporate mess that would have challenged the world’s greatest managers, Steve slowly started to show what he had learned in the eleven years since he was last at Apple. He had developed some discipline as he salvaged NeXT and
negotiated a deal and an IPO for Pixar. He had learned the value of patience and had absorbed from Ed Catmull some proven managerial principles for leading a company loaded with creative talent. He had seen the long, slow, and twisting build of a great product, as John Lasseter and his crew followed their instincts for good and for bad, bit by bit, until their little idea of making a movie about playthings turned into the masterpiece of Toy Story. He had taken all this to heart, in a way no one could have predicted and he could not have explained. Now, decision by careful decision, he would start to combine this new understanding with his old talents, and shape a slow, careful comeback for Apple.
“I CALLED STEVE a couple of times after he sold NeXT to Apple,” Lee Clow remembers, “and every time, he said he wasn’t sure if he was going back, that the place was a mess, that Amelio was a dummy. Then one day in the summer, I get a call and it’s Steve. ‘Hey, Lee,’ he says, ‘Amelio resigned!’ as if it was a big surprise even to him. ‘Can you get up here? We’ve got work to do.’ ”
Talk about an understatement. Apple’s litany of woes seemed never-ending.
Just about everything was headed in the wrong direction. In Apple’s fiscal year ending September 26, 1997, the company lost a whopping $816 million. Its annual revenues had shrunk to $7.1 billion, down precipitously from a peak of $11 billion in fiscal 1995. The steady erosion of Apple’s business had punctured investor confidence, and the stock price since 1995 had lost nearly two-thirds of its value: a block of shares purchased in late 1995 for $3,000 was now worth roughly $1,000.
Those weren’t even the scariest numbers. These were the glory years for the PC industry; 80 million personal computers were sold in 1997, up 14 percent from the year before. Sales of Macs, however, had dropped by 27 percent, to a mere 2.9 million machines, giving Apple a minuscule 3.6 percent sliver of the market that year. Much of the pain was self-inflicted: the few buyers who didn’t opt for PCs were often making purchases from the growing number of manufacturers turning out Macintosh clones.
But the deepest reason demand had softened was that Apple’s products were stale, expensive, and increasingly irrelevant. Lacking the technological advantage of a state-of-the-art operating system, Spindler and Amelio had allowed Apple’s marketing teams to order up all kinds of different models of the Macintosh, in hopes that computers with specialized features would appeal to particular customer niches. The effort was a fiasco, littering the market with a confusing and redundant array of slightly different Macs, each requiring unique parts and assembly methods, each promoted with its own inconsistent and frequently conflicting marketing message.
There was also a grab bag of other failures. Apple had spent nearly a half billion dollars developing and promoting Sculley’s Newton, but had managed to sell only 200,000 since its 1993 debut. That hadn’t stopped Amelio from hatching a Newton sibling, albeit with a keyboard, for elementary school students. Called the eMate, it was an oddly intriguing device that looked like a junior laptop done up in translucent aquamarine, with a bulbous cover and an oblong hole along one edge that functioned as a handle. It too failed to sell well. And then there were the printers. Believing that it had to offer a full-service office solution, Apple still sold its own printers. But its only noticeable contribution to the product was the plastic shell it designed to go around printer engines it purchased from Canon. Apple usually sold the machines at a loss. A hybrid Mac/TV for college students and a cheap consumer multimedia computer/game machine called the Pippin rounded out Apple’s desperate array of ill-defined, marketing-driven products. Seen together, this mishmash of offerings represented a company that had lost its soul and become derivative. By the winter of 1997, hundreds of thousands of unsold machines gathered dust in warehouses.
THAT PHONE CALL to Clow was the beginning of Steve’s first big move as iCEO. Steve decided Apple needed an advertising campaign to reaffirm Apple’s old core values: creativity and the power of the individual. It needed to be something radically unlike the meek and confused product advertising that Apple had been offering consumers for years. Instead, this campaign would celebrate the company—not the company as it was that summer of 1997, but the company Steve imagined Apple should be. On the surface, it seemed an outrageous and perhaps spendthrift goal, given the company’s losses and layoffs. But Steve was insistent. And that’s why Clow made the journey north from TBWAChiatDay’s offices in the Venice section of Los Angeles to Apple headquarters in Cupertino.
Technically, Steve made Clow compete for the Apple account with two other agencies. “But he basically told me that it was ours, if I could deliver what he wanted,” remembers Clow. He had several advantages over his competitors. First, of course, he had created the most memorable ad in Apple history (and arguably in the history of advertising), the “1984” Super Bowl spot for the original Mac. Second, he and Steve had a good rapport. They were both middle-class kids with limited formal educations, and they both abhorred the conventional patterns of corporate behavior. While Steve had by now given up the open-toed-sandals look for jeans and a standard T-shirt, Clow came to work in Hawaiian shirts and zipped around the offices on a skateboard. Furthermore, Clow admired Steve’s brilliance and was unafraid of his temper. “I grew up working for Jay Chiat,” he remembers, “and Jay could let loose some tantrums of his own. He was just as ferocious as Steve. But their goals were both the same. Extraordinary work, at any cost. And like Steve, Jay wouldn’t get in your way as you tried to achieve that. Both of them understood that you were going to fail a lot.”
When the time came for Clow to present his work, he and his team had “Think Different” ready. Steve hesitated briefly when shown the first boards for the campaign, which paired the phrase with photos of noteworthy creative mavericks. His worry? That any campaign celebrating individual genius would suffer from the idea that Steve was simply out to celebrate his own creative genius. But he went with ChiatDay anyway. “His decisiveness was so different from the crew that had been there,” Clow remembers. “No sending things off to some marketing exec somewhere for approval, no vetting by some committee. In the old regime, you never knew who was making the decision. With Steve it was totally different. It was him and me. You don’t get that at any companies—no CEO gets involved the way he does.” The campaign went through several iterations over the course of a few anxious weeks, with Steve fretting the details right up until the final night. Clow pushed hard for Apple to go with a recording of Steve narrating the stirring free-verse essay that elaborated upon the campaign’s motto. He sent the studio that was to broadcast the ad during the network premiere of Toy Story both Steve’s version and another read by the actor Richard Dreyfuss. In the morning, Steve called Clow to tell him they had to run Dreyfuss’s version. “If we go with mine,” Steve said, “it’ll become about me. And this can’t be about me. It’s about the company.” It was not the decision of an egomaniac, of someone only out for himself. “Which is why,” Clow remembers, “he’s the real genius and I’m just the ad guy.”
So on the day of the broadcast, it was Dreyfuss’s voice behind a slide show of portraits of Albert Einstein, John Lennon, Pablo Picasso, Martha Graham, Miles Davis, Frank Lloyd Wright, Amelia Earhart, Charlie Chaplin, and Thomas Edison, among others:
Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes.
The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them.
About the only thing you can’t do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward.
Maybe they have to be crazy.
How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that’s never been written? Or gaze at a red planet and see a laboratory on wheels?
We make tools for these kinds of people.
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While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
The campaign, which played out in posters, billboards, TV spots, and print ads, received unanimous critical praise. The brilliance of “Think Different” is that it celebrated a counterculture philosophy in a way that allowed almost everyone to feel part of the celebration. Its message was the advertising equivalent of an ideal Apple product—bold and aspirational and accessible all at the same time. It was heartfelt. The language, which Steve worked on along with Clow and others at TBWAChiatDay, focused outward, defining the quality of an Apple buyer, rather than of a particular machine itself. There’s no computer mentioned, in fact. Just “tools,” created for the creative. The campaign’s clarity and simplicity stood out prominently from the morass of other computer advertising and reminded people of the fresh spirit so many had once loved about Apple. The $100 million campaign began the polishing up of Apple’s image, a necessary task that would take years.
It paid off in two immediate ways. First, Think Different started a process of bringing pride back to Apple’s employees. Billboards and posters went up across the Cupertino campus. Steve’s narrated version was featured in a video promoting the whole campaign inside the company, and later, after Apple won the Emmy Award for the best television ad campaign for 1998, the company gave a fifty-page commemorative book to all its employees. “Our audience was the employees as much as anyone else,” says Clow. Inspiring them was challenging, especially when Steve was shuttering divisions of the company and laying off thousands of workers. But Think Different gave the surviving employees a sense that they might see better days ahead, for the first time in years.
Becoming Steve Jobs Page 24