Becoming Steve Jobs

by Brent Schlender

  Jobs, alone, reviewing his script the day before MacWorld Tokyo in 2001. Courtesy of Brent Schlender

  At the MacWorld Tokyo keynote on February 22, 2001, he reiterated the “digital hub” strategy that he had laid out a few days earlier back in California. This was the beginning of the broadly defined Apple experience, which would eventually lead to Apple becoming the most valuable company in the world. Courtesy of Brent Schlender

  The October 23, 2001, introduction of the iPod was a smallish affair, befitting Apple’s limited initial expectations for the product. Here Steve shows it off to an audience made up of press and Apple employees, at Apple’s Town Hall on its Cupertino campus. Courtesy of Brent Schlender

  Steve worked hard to repair his relationship with Lisa. She was his daughter from an earlier relationship, and at first he had denied his paternity. Here, in 1994, he plays the harmonica for her while Laurene looks on.

  Steve and Laurene attended the wedding of Mike Slade in 2001. Slade, who worked for both Bill Gates and Jobs, believes that he may be the only person to have attended the weddings of both computer industry titans. Courtesy of Mike Slade

  Steve in his home office in Palo Alto in 2003.

  Steve and his family took vacations together at least twice a year, often going to Hawaii or to Europe. In 2005, they went to Mexico, and here they emerge from a sweat lodge together. That’s Evie in front, with Erin, Laurene, Reed, and Steve behind her.

  What looks like a Steve Jobs “selfie” with Laurene, taken in Paris during a vacation in 2003.

  Jobs waves to the crowd assembled for the introduction of the iPad2. It was to be his last Apple product presentation, on March 2, 2011. He died seven months later. © Paul Chinn/San Francisco Chronicle/Corbis

  Chapter 11

  Do Your Level Best

  The world was opening up to Apple bit by bit, and vice versa. The iPod was Apple’s first mass-market consumer device, but it had come about because Steve and his team had taken one logical step after another: first iMovie, then a correction leading to iTunes, then the iPod. Steve’s patience, discipline, and vision had set Apple on a new course, one that was more complicated than its old path, which had simply involved the regular improvement of personal computers. Apple would now follow its explorations to their logical conclusion, even if this led the company into the heart of other industries. If Apple could successfully maneuver in the world of music, it might, under Steve’s leadership, be able to do so in other kinds of business as well. The grand scheme—bringing computing tools to people who could employ them creatively to enhance their lives and work—remained the same. But the breadth of Apple’s horizon had stretched.

  As a mass-market consumer electronics device, the iPod would eventually be sold, of course, all the usual places: Best Buy, Circuit City, big-box department stores, and even the computer retailers like CompUSA. Steve disdained all these outlets. His obsession with his products continued well after they’d been manufactured. The tacky, low-margin hustle of these chains ran completely against the minimalist aesthetic of his products and the clean exuberance of his marketing. There was only one place where he really enjoyed seeing his products sold to the public: his own Apple stores, which had debuted four months ahead of the iPod.

  Going back as far as the debut of the Mac, Steve had always groused about the way Apple computers were sold in its resellers’ stores. The way his computers were displayed and sold represented the very worst of what could go wrong when things weren’t done his way. The salespeople, always interested in quick turnover, seemed to make little effort to understand what was special about a Mac, and had less incentive to do so after IBM and its clones became dominant. Even at NeXT, Steve had talked to Susan Barnes about creating a different kind of computer store, one in which his high-end productions could be shown off to discerning customers.

  In early 1998, just a few months after his return to Apple, he asked his chief information officer, Niall O’Connor, to come up with a proposal for an online store where Apple could sell its computers directly to customers, much like Dell Computer was doing then with such great success. O’Connor asked Eddy Cue, who was then an IT technician in the human resources division, to sketch out an initial version of what the store might look like from a programmer’s perspective. “I don’t think Niall thought I was his best person,” says Cue, “but he did think I could deal with Steve, for some reason.” Cue, who had never met Steve and knew little about e-commerce or retailing, sought advice from a number of people, including head of sales Mitch Mandich. “Give him your best ideas,” Mandich told him, “but it won’t matter because we’ll never do it. It would piss off the channels [the stores and distributors that had traditionally sold Apple’s computers].” One week later, Cue, O’Connor, Mandich, and others attended a meeting to review the initial proposal. Cue handed his presentation to Steve—he’d made it visual, because everyone had told him that Steve preferred visual presentations, and he’d put it on paper, because everyone had told him Steve hated sitting through slides, especially in small meetings. All the research seemed to have gone for naught. Steve looked at his pages, handed them back, and said, “These suck.”

  Despite his gruff initial reaction, Steve asked the others in the room about Cue’s proposal, and about the basic idea of selling direct to customers online. The executives around the table started to talk about all the problems they could foresee with an online store—tying customized purchases into a manufacturing system that had been built to create computers with standardized configurations; not having any research indicating that customers actually wanted to buy computers this way; and, most worrisome, the potential for alienating Apple’s existing retail partners, like Best Buy and CompUSA. Mandich, who was senior enough to know that an interesting discussion was developing, kept silent. Finally, one of the senior guys opposing the idea spoke up. “Steve,” he asked, “isn’t this all pointless? You’re not going to do this—the channel will hate it.” Cue, who didn’t know any better, turned to him immediately. “The channel?” he exclaimed. “We lost two billion dollars last year! Who gives a fuck about the channel?” Steve perked up. “You,” he said, pointing at the senior exec, “are wrong. And you,” he continued, looking at Cue, “are right.” By the end of the meeting, he had asked Cue and O’Connor to create an online store where buyers could customize their purchases—and to have it completed in two months.

  The online store went up on April 28, 1998. As Cue prepared to drive home that evening, he walked past Steve’s office to tell him they’d sold more than a million dollars’ worth of computers in just six hours. “That’s great,” said Steve. “Imagine what we could do if we had real stores.” Nothing would ever be enough, Cue realized. He liked the challenge.

  STEVE LOVED GREAT stores. When on vacation in Italy or France, he would insist that Laurene join him in visiting Valentino, Gucci, Yves Saint Laurent, Hermès, Prada, and the like. Wearing the ragged cutoff jeans and Birkenstocks of a bohemian American tourist out for a long day of informal sightseeing, Steve would squire Laurene around exclusive shopping districts. After strolling into one of these bastions of fashion, he and his striking blond wife would head in completely different directions. While Laurene browsed distractedly, Steve would buttonhole the salesclerks and bombard them with questions: Why had they chosen to devote so little space to their merchandise? How did people flow through the store? He’d look at the stores’ interior architecture, wondering how the interplay of wood, arches, stairways, and natural and unnatural light helped set a mood that was conducive to spending outrageous sums of money. To Steve, these stores were pulling off something he had never been able to manage: they sold a lifestyle product at an absurdly high margin by presenting it in a beautiful and yet informative way. The presentation itself helped justify the higher prices a customer was asked to pay. The dreary aisles and dull salesmen of Circuit City and CompUSA were making no such argument for Apple.

  In 1998, Steve convinced Gap CEO Mickey Drexler
to join Apple’s board of directors. Then, in 2000, he hired Target’s vice president of merchandising, Ron Johnson, and made him part of the executive team, with a bold and simple mandate: Create the ideal store. “The Mac is unique,” Steve told me many years later. “The trick was to get it in front of people somewhere where they could see what makes it different and better, and to have salespeople who had something to say about it. We thought if we didn’t do that, we’d go broke.”

  Johnson came from old-school retailing, but he was the right man for the job Steve had in mind. After earning his MBA at Stanford, Johnson chose to start his career unloading trucks for the Mervyn’s department store. He then moved up the ranks at Target before making his mark by commissioning the architect Michael Graves to design a teapot exclusively for the department store. Graves had designed a teapot for the Italian appliance icon Alessi in 1984 that was still a global bestseller a decade later, and Johnson wondered, “Why are beautiful objects not available to everyday people, but only to the well-to-do?” It was a question that could have popped full-form out of the brain of Steve Jobs.

  When it came time to introduce Graves’s teapot, Johnson engineered an event that also could have been dreamed up by Steve: he rented out the Whitney Museum in New York City to “let the press see what design could be for everyday people.” The teapot, and a line of other merchandise designed by Graves exclusively for Target, set the department store on the path that eventually led to its becoming the high-end, urbane alternative to Walmart. When Jobs came calling, he wooed Johnson, who was not headed toward a CEO role at Target, with the same kind of promise of unlimited opportunity that had worked with Sculley: “You get to do it all,” Steve told him.

  “I looked at it as a chance to work with one of the greatest creators ever,” Johnson told a group of Stanford MBA candidates during a 2014 interview, “but my friends in the Valley all thought that I was nuts. ‘You’re leaving Tar-jzeh [the Francofied pronunciation that both mocked and trumpeted the chain’s high-end position] and going to that loser company?” It was the year 2000, when Apple was still seen as a marginal player in the market for personal computers.

  Throughout the interview process, and in Johnson’s early days at Apple, Jobs spent more time talking to him about personal matters than retail affairs. “The first time we met,” Johnson said, “we talked for two or three hours about all kinds of things. Steve was a very, very private guy. He had grown up fast, and he was only best friends with a handful of people. He told me, ‘I want to be good friends, because once you know how I think we only have to talk once or twice a week. Then when you want to do something you can do it and not feel that you have to ask permission.’ ”

  For some time, Johnson was the only retailer employed by Apple. For weeks after his arrival, he sat in on the executive team meetings and mulled over what would make for the ideal store. The key was the customer experience, and as Johnson pondered this, every idea he came up with was counterintuitive. Stores that sell to a customer once every few years generally opt for cheap real estate in remote locations; but the ideal store, for customers and for a brand looking to make its mark, would be right at the center of things. Telephone support should be fine for such occasional customers, but face-to-face interaction is what people really want, especially with computers, which are a lot harder to understand than, say, a raincoat. Salespeople are motivated by commissions, but customers don’t want to feel pressured into buying something they don’t want. Johnson came up with almost a dozen of these ideas, each of which went against the heart of traditional retailing practice. According to Johnson, Steve supported all of his most far-reaching thoughts. “ ‘If you think something through hard enough,’ Steve would say, ‘you’ll get to the inevitable answer,’ ” remembers Johnson.

  At Mickey Drexler’s suggestion, Jobs asked Johnson to develop a prototype for what an Apple retail store might look like. Commandeering a warehouse a couple of miles away from the Apple campus, Johnson built his prototype under the greatest secrecy. Much like an Apple computer under development, the prototype went through several iterations. It was a design project as much as anything, and Steve pushed for a minimalist, clean feel, with easy navigation around tables featuring Apple’s laptops and desktop computers.

  By late 2000, Jobs and Johnson had a prototype they liked. But on a Tuesday morning in October, Johnson woke up with an epiphany: the layout of the stores, which revolved around areas selling particular product lines, was all wrong. Steve and the executive team had been discussing one subject endlessly in their Monday-morning meetings: the digital hub. Johnson realized that the stores should be laid out to match that concept, with an area built around music, and another built around movies, and so on. It was, once again, a counterintuitive thought—and yet it was also, once again, a thought that would serve customers better than the more common approach that Apple had been on the verge of embracing. That morning, Johnson joined Steve for a previously scheduled review of the prototype. On the car ride over to the prototype hangar, Johnson told Steve that he thought they’d gotten it all wrong. “Do you know how big a change this is,” Steve roared. “I don’t have time for this. I don’t want you to say a word to anyone about this. I don’t know what I think of this.” They sat for the rest of the short ride in silence.

  When they arrived at the hangar, Steve spoke to the assembled group: “Well,” he said, “Ron thinks we’ve designed our stores all wrong.” Johnson waited to hear where this line of thought would go. “And he’s right,” said Steve, “so I’m going to leave now and you should just do what he’s going to tell you to do.” And Jobs turned around and left.

  Later that day, after he’d returned to the Apple campus, Johnson went to see Steve. “You know,” Steve told him, “you reminded me of something I learned at Pixar. On almost every film they make, something turns out to be not quite right. And they have an amazing willingness to turn around and do it again, till they do get it right. They have always had a willingness to not be governed by the release date. It’s not about how fast you do something, it’s about doing your level best.”

  The first stores opened in Tysons Corner, Virginia, and Glendale, California, in May 2001. They featured Apple’s iMacs, Power Macs, iBooks, and PowerBooks, plus an array of software, a small selection of “how-to” books, some peripheral equipment from other manufacturers like printers and hard disk drives, and an assortment of cables and other accessories. The reaction was fairly uniform: Steve had made a foolish mistake. BusinessWeek excoriated the stores as yet another example of Steve’s extravagance. One critic after another pointed to the fact that Gateway, perhaps the most marketing-savvy of all the Wintel PC makers, had recently shut down its own chain of more than one hundred retail stores because of poor sales. But just as Jobs had no use for typical market research when formulating product strategy, he dismissed Gateway’s misadventure as irrelevant. “When we started opening stores, everyone thought we were crazy,” he told me. “But that was because the point of sale had lost its ability to communicate with the customer. Everybody else was selling computers that were the same thing—take off the bezel or company nameplate and it’s the same box made in Taiwan. With so little differentiation, there was nothing for the salespeople to explain except the price, so they didn’t have to be very sophisticated, and those stores had tremendous turnover in their sales force.”

  The Apple stores fared fairly well from the beginning, but primarily as havens for those who already loved Apple and its high-priced gear. Early traffic patterns revealed just how deeply the company needed a transformative new product. Basically, Apple had a demographic problem—adolescents and young adults didn’t think the company or its products were as cool as their parents did. Part of the reason was that Apple’s iMacs and iBooks, as beautiful and compelling as they were, were still too pricey for kids to buy on their own: only their baby boomer parents could afford to write a check or whip out a credit card and bring one home. At the stores, Apple had nothing of i
ts own to sell that appealed directly to the Generation X- and Y-ers.

  Enter iTunes and the iPod. With their introduction, the stores quickly became the perfect medium for demonstrating Apple’s new digital hub concept. Highly trained salespeople—on salary, not commission—showed customers how to use their iMacs and iTunes to “rip, mix, and burn” their own customized audio CDs. Others taught Mac owners how to use iMovie to edit digital movies. The stores offered group lessons in how to transfer playlists and albums to an iPod, even though it was a very simple process. “The people who work in our stores are the key,” Steve said. “And our turnover is very low for retail. So our power is in our people.”

  As the stores attracted more visitors, Apple expanded its sales of digital cameras, camcorders, speakers, audio amplifiers, headphones, printers, hard drives, CD-ROM burners, and the like made by other manufacturers. Slowly but steadily, over the years, the stores would become the most successful retail outlets in the world, when measured by sales per square foot. Jobs pushed Johnson to be increasingly audacious with the architecture of the stores, which eventually led to iconic features like the cube of glass in front of the GM building in midtown Manhattan. “Steve was the best delegator I ever met,” Johnson said at Stanford. “He was so clear about what he wanted that it gave you great freedom.”

  MUSIC REVIVED THE company. Between iTunes, its “Rip Mix Burn” ad campaign, and the iPod itself, Apple was finally generating heat with younger buyers. But the momentum and the insouciant advertising gnawed at some older folks in the music and film business. In 2002, long after the offending ads had ceased running, Disney CEO Michael Eisner complained in a hearing before the U.S. Senate Commerce Committee that Apple was guilty of openly touting illegal behavior. “They are selling the computer with the encouragement of the advertising that they can rip, mix, and burn,” he said. “In other words, they can create a theft and distribute it to all of their friends if they buy this particular computer.” Steve was livid when he read the transcript, but felt somewhat vindicated after Eisner was widely ridiculed for his somewhat naïve comment. The tone of Apple’s ad campaign walked a fine line, but Steve actually sympathized with Eisner and the record labels. He understood the perils of piracy, both as a computer industry executive and as the owner of a movie studio. He had sued Microsoft for what he believed was its theft of the Mac’s desktop graphical user interface, and, like everyone in Silicon Valley, he was paranoid about intellectual theft.