Return to the Little Kingdom

by Michael Moritz

  Wozniak and Jobs were much more interested in practical matters and in expanding their collection of gadgets than in lingering around a university. Following instructions printed in Abbie Hoffman’s Steal This Book and the left-wing magazine Ramparts, Wozniak equipped himself with a black box that allowed free incoming calls and a red box that simulated the sound of coins dropping into a pay phone.

  But the most lucrative and amusing part of the arms collection was the blue box. Wozniak soon showed its virtues to his friends. He displayed its power to Allen Baum at two phone booths near Homestead High School. Wozniak phoned one booth from the other which allowed Baum to say hello into one receiver and scamper around to hear his greeting echo through the other. Wozniak made some calls to his sister who was working on a kibbutz in Israel. On Jobs’s urging the pair turned a pastime into a small business and began selling the devices. “He wanted money,” Wozniak said of his partner.

  The pair employed their own marketing techniques for uncovering customers and boosting sales. They crept along the corridors of male dormitories at Berkeley (convinced that few women would be interested in their little device), knocking on doors and measuring the response to their rehearsed patter. “Is George here?” one of them would ask cagily. “George?” came the surprised response. “Yeah, George. You know the blue-box guy. The guy who does the phone tricks. The guy who has the blue box to make free long-distance phone calls.” Jobs and Wozniak watched the expression of their potential customer. If they were greeted with puzzled, timid looks they apologized for knocking on the wrong door and padded off down the hallway. If their ploy provoked a curious response, the potential customer was invited to attend a blue-box demonstration.

  After a few weeks the dormitory sales pitches assumed a pattern. Wozniak hooked a tape recorder to the telephone with some alligator clips and he and Jobs explained the basic principles of the blue box. Then they followed up with a display of its power. Wozniak, in particular, relished being the center of attention. “It was a big show-off thing.” They called the home numbers of friends and relatives of some of their audience in the United States. Then they started phoning overseas and finally they tried to build a global link—starting in Berkeley and bouncing through operators in several countries—and finishing at another nearby Berkeley telephone. On one occasion Jobs used the box to make room reservations for a large party at the Ritz Hotel in London and, unable to suppress his giggles, handed the receiver to Wozniak. Another time Wozniak said that he pretended to be Secretary of State Henry Kissinger and phoned the Vatican asking to be connected to the Pontiff. A Vatican functionary explained that the Pope was still asleep but that somebody would be dispatched to wake him. Another official came on the line and tumbled to the ruse.

  The demonstrations provoked curiosity and Jobs and Wozniak made cassette tapes of tones that friends would need to call their favorite long-distance numbers. The evening shows also produced orders. The pair came to an informal agreement about the manufacture of the blue boxes. Jobs arranged a supply of about $40 worth of parts and Wozniak took about four hours to wire a box which was then sold for about $150. To cut down on the time it took to build boxes the pair decided to stop wiring the boxes by hand and to have a printed circuit board made. Instead of spending four hours wiring a box, Wozniak could now finish a box within an hour. He also added another feature that turned one button into an automatic dialer. A small speaker and battery were attached to the printed circuit board, a keypad glued to the lid, and when all was finished, a card bearing a message written in purple felt pen was taped to the bottom. It read “He’s got the whole world in his hand” and it was linked to an informal guarantee. Wozniak promised that if a faulty box was returned and still contained the card he would repair it free of charge.

  After about a year Jobs, through a combination of boredom and fear of the possible consequences, bowed out of the business. There were, after all, only so many relatives, friends, weather recordings, automatic clocks, and dial-a-jokes to call. There was also good reason to be anxious: The telephone companies were cracking down hard on the phreaks and employed security agents to snap photographs at phone-phreak conventions, placed houses under surveillance, installed tracing equipment at switching stations, rewarded informants, paid double agents and launched occasional raids. Sinister aspects and disquieting rumors accompanied the pastime. Some phone phreaks even placed tarantulas in the mail boxes of security agents and there was talk of organized crime taking an unseemly interest in the lucrative nature of the business.

  Jobs was also suspicious of Captain Crunch. Draper’s frantic tone, his habit of interrupting phone conversations with emergency calls, his hysterical behavior when cigarettes were lit, and his invitations to physical exercise sessions made Jobs wary. “He was spaced out and weird.” Jobs thought that the legend, portrayed in the Esquire article, ran ahead of the facts. Even the bootleg 65-watt FM radio station San Jose Free Radio that Draper broadcast most weekends from the back of a van parked in the hills near the Lick Observatory didn’t compensate for his quirks. Jobs’s judgment was borne out. Though Jobs didn’t know it at the time, General Telephone had placed a trace on Draper’s telephone to tape his outgoing calls. Among the names and telephone numbers eventually handed over to the FBI was that of the Jobs household. In 1972 Draper was convicted of a wire-fraud charge but escaped with a $1,000 fine and five years of probation. The hobby also proved dangerous in another way. Preparing to sell a box one evening in a parking lot outside a Sunnyvale pizza parlor, Jobs suddenly found himself staring at a customer with a gun. “There were eighteen hundred things I could do but every one had some probability that he would shoot me in the stomach.” Jobs handed over the blue box.

  For a while Wozniak ran the business by himself. He discovered other tricks, such as how to make free calls from the telephones that hotels and car-rental firms leave at airports. On occasion he also tapped the housemother’s phone at Berkeley and listened in on conversations at the FBI office in San Francisco. For about a year before their interest petered out and the phone company started to refine its switching equipment, Jobs and Wozniak switched roles. The former kept his distance while Wozniak took orders at his parents’ house and casually minded the operation. Nevertheless he split with Jobs the $6,000 or so that he earned from the sale of about two hundred blue boxes: “It was my business and Steve got half of it.”

  A couple of Wozniak’s friends distributed the boxes around Berkeley while a high-school student who masqueraded under the name Johnny Bagel helped arrange sales in Beverly Hills. Some of Wozniak’s blue boxes wound up in the hands of international swindler Bernie Cornfeld and rock singer Ike Turner. At times the distributors harassed Wozniak who became bored with the repetitive assembly work. He took to ordering parts from electronics distributors under an assumed name and sometimes flew to Los Angeles to deliver blue boxes, checking his small suitcase as baggage to avoid the airport X-ray detector. On one occasion his attempts at subterfuge ended in confused embarrassment. He booked a plane ticket to Los Angeles under the name Pete Rose, oblivious to the fact that it belonged to one of the best-known major-league baseball players. Wozniak arrived at the airport, told the ticketing agent he was picking up a ticket for Pete Rose, and then discovered that he didn’t have enough cash for the ticket but also didn’t want to pay with a check that carried his real name.

  Wozniak had proved himself a master of the hardware terminal, the blue box. It was built from an original design and was capable of competing with the smartest around. He gave further evidence of his prowess by concealing a blue box inside the case of a Hewlett-Packard calculator. His command of software was more questionable. He didn’t devote the time needed to master the telephone system as thoroughly as some of the other phreaks, and though he eluded capture, many of his customers weren’t so lucky. In the informal hierarchy of phreaks, Wozniak fell more into the realm of hacker than phreak.

  He didn’t even experiment with placing calls on AUTOVON, a
telephone system used for military communications that was a playground for the hardened phreaks. One AUTOVON habitué, Burrell Smith, felt Wozniak “didn’t understand the network which takes devotion and a full-time passion.” There was another penalty: his college work. Though Wozniak had arranged a dream timetable of two courses that were taught one after another in the same lecture room on four afternoons a week, he found telephones more entertaining. By the summer of 1972, he had again fallen foul of a college dean and was receiving letters scolding him for his poor academic performance.

  “We’ve yet to see diddly squat,” Carter said.

  Bottles of apple juice, packets of potato chips, and plates of turkey, chicken, and salami sandwiches lay at one end of a long conference table. At the other end Steve Jobs, rigged out in shirt, tie, and corduroys, was tapping his feet on the rug and drumming his fingers against the tabletop. He was waiting to start a weekly lunch meeting with the managers of different departments in the Mac division. Bob Belleville, the head of engineering, Matt Carter, the head of manufacturing, Mike Murray, the marketing manager, Debi Coleman, the financial controller, Pat Sharp, Jobs’s personal assistant, and Vicki Milledge from the human resources department strolled into the room.

  “C’mon! We’ve got a lot of shit to get through today,” Jobs said to the six managers as they chatted and sauntered around the table. He began to quiz Bob Belleville, the bespectacled engineer, about a dispute between two of his staff.

  “What are you going to do about George eventually?” Jobs asked.

  “Eventually,” Belleville replied in a mild tone, “I’ll be dead.”

  “The only way we’ll keep George,” said Jobs ignoring the quip, “is to give him all the analog electronics. Unless he feels responsible for all analog electronics he’ll go somewhere else. He’ll get a great job offer to run engineering in some start-up.”

  Belleville predicted that any such promotion would upset Hap Horn, another engineer who was working on a troublesome disk drive.

  “If Hap blackmails you and says he’ll quit,” Jobs said, “you go by him. Once Hap gets off the critical path you ought to do it.”

  “We need to finish this discussion off line,” Belleville said demurely.

  Turning his attention to the long agenda, Jobs fretted about the production of instruction manuals. Activity in the publications department served as a rough barometer of progress since it monitored conditions between two fronts. One was formed by the gusty tinkering of the lab bench while the other loomed in the shape of the implacable introduction date.

  “I see this stuff slipping and slipping out of pubs,” Jobs said turning to Michael Murray, the marketing manager. “They’re doing a great job but they’re not getting anything done. Get on top of it.” Murray nodded.

  Jobs worked his way farther around the table and addressed Matt Carter, who was responsible for manufacturing the computer and monitoring progress at Apple’s factory near Dallas. “Can I suggest something?” Jobs said. He didn’t wait for a reply and his supplicatory tone evaporated. “Your group doesn’t interact with marketing or engineering. They’re not back in the lab. They’ve got to get into the spirit of Mac. Introduce them to everyone. You’ve got to push ’em into interaction.”

  “I’m taking a party to Dallas,” Carter grinned. “So that they can interact the shit out of each other.”

  Jobs abruptly changed the discussion to the growth of the division. Recruiting new people was a perennial feature of life at Mac and gobbled up much of the time of its senior managers. Jobs glanced at a sheet of paper and said: “We had forty-six people last month.”

  “We’ve got sixty today,” corrected Vicki Milledge, the woman from human resources.

  “God! Wow! We’re really cracking,” said Jobs.

  “There’s been a whole trail of people through here,” Michael Murray observed and mentioned a candidate from Xerox. “She’s in the process of resigning from Xerox which takes much longer than interviewing at Apple.”

  “When’s Rizzo going to let you know?” asked Jobs, referring to a candidate for the same position.

  “He’s procrastinating,” said Murray.

  “I’d pick Rizzo,” said Jobs. “He’ll get into the trenches faster. Get clear in your mind who you want.”

  Murray dropped the name of a woman who was working for a venture-capital firm but had indicated she would take a $40,000 drop in salary to work at Apple.

  “Is she beautiful and single?” Jobs inquired.

  “She’s not single,” Murray chuckled.

  “Are we interviewing for the Barbizon School of modeling?” Debi Coleman asked.

  Jobs latched onto another name.

  “He’s doing planning,” said Murray.

  “He’s a venture capitalist,” retorted Jobs. “Sounds like a bullshit job to me.”

  “What about Steve Capps?” asked Jobs.

  “He works at Lisa,” Belleville remarked as though he wasn’t about to embark on a raiding mission at another division of the company.

  “I heard through the grapevine he wants to work over here,” Jobs replied.

  Matt Carter asked what his colleagues thought about a possible recruit for the manufacturing team, provoking Debi Coleman to venture, “He talked a good line. He asked the right questions.”

  “His batteries are too low. I didn’t trust the guy,” Jobs said and immediately suggested an alternative. “They’ll like Duke a lot more. He’s awake. He’s more conservative, drives a two-eighty-Z and wears glasses.”

  Vicki Milledge chipped in that she wasn’t allowed to have a secretary, or what at Apple was known as an “area associate.”

  “Why not?” Jobs demanded.

  “Because of the budget,” Milledge said.

  “Screw ‘em,” Jobs retorted.

  Pat Sharp, a woman with curly hair and spectacles, broached the subject of moving the division lock, stock, and barrel to a larger building. The Mac group was squeezed into one half of a single-story, red-tiled building, and some of its members worked in an annex. It was poised to move into another building on the opposite side of Cupertino’s Bandley Drive, a road Apple had turned into a corporate alley. Apple’s presence along the road was so pronounced that the buildings were known by the order in which the company had occupied them rather than by street numbers. “I was wondering about the layout,” Sharp ventured.

  “I’m willing to spend a million bucks to fix up Bandley Three,” Jobs announced. “We’ll fix it up real nice and that’s it. That’s our final resting place. Put your energy into it. It’s going to be laid out for one hundred people. I don’t have any interest in running a division of more than a hundred and you’re not interested in working with more than a hundred. There will be no trailers, no outhouses, no nothing. If Bob wants a new software guy, someone else will have to go.”

  “Can we put a weight room in or an exercise clinic?” asked Murray.

  “No,” Jobs said. “We’ll have a few showers and that’ll be it. Think about what you want,” Jobs urged. “If the software or pubs people want private offices, now’s the time to think about it.”

  He turned to a more immediate concern, a pilot build of two hundred Mac printed circuit boards that would be used for testing. Matt Carter reported the progress. “The kits are almost in. We’re going to stuff ’em next week.”

  “Why don’t we order another twenty-five boards?” Jobs asked.

  Debi Coleman agreed. “Is there any logic behind the two hundred? Last time we built fifty and then we wanted seventy-five.”

  That reminder prompted Jobs to worry aloud that some of the existing printed circuit boards would fall into the hands of a competitor or one of the offshore firms that specialized in churning out low-priced, copycat computers. “I want to pull the first fifty and I want to trash them and have them compressed into a giant garbage compactor.

  “When do we start building?”

  He heard the date for the pilot-build start and was struck
by another thought.

  “What about beer busts?” he asked, referring to a recent party. “Do you want any more like that?” He paused briefly: “When’s our next party?”

  “Christmas,” said Murray.

  “That’s in January because everybody’s so busy,” said Jobs. “What about early November? What about a rock ‘n’ roll party? We’ve just had a square dance. Rock ‘n’ roll. Square dance. That’s the universe. We’ll have a Halloween rock ‘n’ roll dance.”

  Carter told his colleagues that he was about to depart on a trip to the Far East to inspect possible parts suppliers and had already begun to place orders. Jobs exhaled at the news.

  “This is like a train starting up that takes a quarter of a mile to stop and we haven’t even got the track laid.” He paused and turned to Carter and Belleville. “We’ve got to really test the main logic board. We’ve got to test hot and cold.” He slapped the table. “Details. Details. Details. There’s a lot more money in the digital board than the analog board. If we’re going to have a fuck-up let’s have it in the digital board.”

  “We’re really in trouble with the analog board,” Carter countered. “Right now we’re being told it’ll be ready in forty-five days but we’ve yet to see diddly squat. We kicked ’em in the butt and they said they want ninety days. They’re going to have to bust ass even more than they think.” Carter returned to the need to place orders for parts and Jobs mentioned two suppliers: “I like Samsung better than Aztec. Can we negotiate with them?”

  “We cannot take the risk,” said Carter. “We’ve got to give them both big incentives.”

  The group moved on to consider the possible pricing of the computer. For some months the general aim had been to sell the computer for $1,995. Jobs wanted to be assured by the financial controller, that it would still meet Apple’s profit targets if it was priced at $1,495. Coleman, who had been considering what effect changes in price might have on sales volume, started to draw a graph and curves on a blackboard. Jobs watched for a moment, listened to Coleman as she explained her diagram, and said, “We could pull numbers out of our ass and do anything. Any curve is total crap. If you believe it you’re being fooled.”