by Adam Fisher
Mark Pincus: In 2006 Yahoo offered Facebook $1.2 billion I think it was, and it seemed like a breathtaking offer at the time, and it was difficult to imagine them not taking it. Everyone had seen Napster flame out, Friendster flame out, MySpace flame out, so to be a company with no revenues, and a credible company offers a billion-two, and to say no to that? You have to have a lot of respect to founders that say no to these offers.
Dustin Moskovitz: I was sure the product would suffer in a big way if Yahoo bought us. And Sean was telling me that 90 percent of all mergers end in failure.
Mark Pincus: Luckily, for Zuck, and history, Yahoo’s stock went down, and they wouldn’t change the offer. They said that the offer is a fixed number of shares, and so the offer dropped to like $800 million, and I think probably emotionally Zuck didn’t want to do it and it gave him a clear out. If Yahoo had said, “No problem, we’ll back that up with cash or stock to make it $1.2 billion,” it might have been a lot harder for Zuck to say no, and maybe Facebook would be a little division of Yahoo today.
Max Kelly: We literally tore the Yahoo offer up and stomped on it as a company! We were like, “Fuck those guys, we are going to own them!” That was some malice-ass bullshit.
Mark Zuckerberg: Domination!!!
Kate Losse: He had kind of an ironic way of saying it. It wasn’t a totally flat, scary “domination.” It was funny. It’s only when you think about a much bigger scale of things that you’re like, Hmmmm: Are people aware that their interactions are being architected by a group of people who have a certain set of ideas about how the world works and what’s good?
Ezra Callahan: “How much was the direction of the internet influenced by the perspective of nineteen-, twenty-, twenty-one-year-old well-off white boys?” That’s a real question that sociologists will be studying forever.
Kate Losse: I don’t think most people really think about the impact that the values of a few people now have on everyone.
Steven Johnson: I think there’s legitimate debate about this. Facebook has certainly contributed to some echo chamber problems and political polarization problems, but I spent a lot of time arguing that the internet is less responsible for that than people think.
Mark Pincus: Maybe I’m too close to it all, but I think that when you pull the camera back, none of us really matter that much. I think the internet is following a path to where the internet wants to go. We’re all trying to figure out what consumers want, and if what people want is this massive echo chamber and this vain world of likes, someone is going to give it to them, and they’re going to be the one who wins, and the ones who don’t, won’t.
Steve Jobs: I don’t see anybody other than Facebook out there—they’re dominating.
Mark Pincus: So I don’t exactly think that a bunch of college boys shaped the internet, I just think they got there first.
Mark Zuckerberg: Domination!!!!
Ezra Callahan: So, it’s not until we have a full-time general council on board who finally says, “Mark, for the love of God: you cannot use the word domination anymore,” that he stops.
Sean Parker: Once you are dominant, then suddenly it becomes an anticompetitive term.
Steven Johnson: It took the internet thirty years to get to one billion users. It took Facebook ten years to get to one billion users. The crucial thing about Facebook is that it’s not a service or an app—it’s a fundamental platform, on the same scale as the internet itself.
Steve Jobs: I admire Mark Zuckerberg. I only know him a little bit, but I admire him for not selling out—for wanting to make a company. I admire that a lot.
Purple People Eater
Apple, the company that cannibalizes itself
Only three years after reviving Apple on the back of the iPod, Steve Jobs decides to make it obsolete. As an Atari alumnus, Jobs knows firsthand the danger of trying to milk a hot product for all it is worth. He knows that somebody at some point will unseat Apple’s iPod monopoly with an MP3 player that can also place a phone call. Thus, Jobs concludes, Apple has to act first. So he sets up a skunkworks: Project Purple. Then, to make sure that the phone-of-the-future project has the proper urgency, Jobs divides Purple into two groups—and pits them against each other. P1 is quarterbacked by Tony Fadell, the hardware hero who had changed Apple’s fortunes with the iPod. P2 is led by Scott Forstall, a software wiz from Apple’s Macintosh team. Will the new Apple phone be a tiny Macintosh or a supersized iPod? In the end, Jobs chooses Forstall’s version—a tiny Macintosh—and uses the iPhone’s debut to send a message to Fadell. Jobs disses Fadell from the stage, surreptitiously but before an audience of millions. Fadell’s days at Apple are numbered.
Phil Schiller: Apple had been known for years for being the creator of the Mac computer. And it was great but it had a small market share. And then we had a big hit called the iPod, and this really changed everybody’s view both inside and outside the company. People started asking, “Well, if you can have a big hit with the iPod, what else can you do?” And so we were searching for what to do after the iPod that would make sense.
Scott Forstall: And one thought was a tablet.
Phil Schiller: People were suggesting every idea: make a camera, make a car, crazy stuff!
Scott Forstall: And we settled on this idea of a beautiful tablet without a keyboard, without a hinge.
Jon Rubinstein: But the technology just wasn’t there yet. Different combinations of horsepower, battery life, display technology: None of those worked for a tablet yet. But we’d acquired the technology for doing multitouch, so we could develop that. Multitouch is the ability to directly interact with your screen and be able to pinch and zoom and drag and all those kind of things.
Steve Jobs: I had this idea of being able to get rid of the keyboard and type on a multitouch glass display. So I asked our folks if we could come up with a multitouch display that I could rest my hands on and actually type on.
Phil Schiller: We thought that if you wanted to type really fast, you are going to be touching that surface with more than one finger. At the time no one had really done anything with multitouch, and we knew that was really important.
Scott Forstall: So we started building prototypes and demos to see if we could build a tablet. That was 2003.
Steve Jobs: And about six months later they called me in and showed me this prototype display and it was amazing.
Nitin Ganatra: There was just this enormous contraption that was created partly by the Mac hardware team. So what we actually had was this tablet-looking device with a big fat cable that connected it to a Macintosh.
Scott Forstall: We were asking ourselves, “Could we use the technology that we were prototyping for this tablet to build a phone?”
Tony Fadell: Mobile phones were coming on strong…
Nitin Ganatra: But all of the technical advancements around phones were happening somewhere other than Silicon Valley. All the interesting work was either in Finland or in Japan or in Canada. There was nothing in the US, much less in Silicon Valley.
Scott Forstall: We all hated our phones. We had flip phones at the time.
Nitin Ganatra: And every single one of them to a T is just dogshit. We’d hold up our phones and show each other the latest and greatest and look at them. “This is the latest and greatest because it has 256 colors on it?” We’re talking about the early 2000s. “This is considered state of the art? Even though, in computing, this problem was tackled twenty years before? How backward is that?” I would talk to Scott about this a fair bit, saying, “When are we going to do a phone?”
Scott Forstall: And so we prototyped a thing which I will never forget. We took that tablet and built a small scrolling list. Now on a tablet we were doing pinch and zoom and scrolls and all these things and we wanted it to fit in the pocket, so we built a small corner of it as a list of contacts.
Nitin Ganatra: All the pixels and everything were sort of shoved down into a corner to more accurately reflect what a phone’s form factor would actually
look like.
Scott Forstall: And you’d sit there and you’d scroll this list of contacts and you could tap on that contact. It would slide over and show you the contact information and you could tap on the phone number and it would say, CALLING. It wasn’t calling but it would say it was calling, and it was just amazing.
Steve Jobs: And when I saw the rubber-band inertial scrolling and a few of the other things, I thought, My God, we can build a phone out of this!
Jon Rubinstein: Because the key to a phone is “Can you get through the names quickly?” Right? One of the big issues with the iPod was, “How the hell do you find the song that you want to play?” So if you are not going to have a scroll wheel on the iPhone, then you needed an equivalent user interface paradigm to get to who you wanted to call.
Nitin Ganatra: Even though it was this big, clunky contraption and things didn’t quite work right, you could see that it was far and away better than the piece of trash that you had in your pocket.
Scott Forstall: We realized that a touch screen that could fit into your pocket would work perfectly as one of these phones.
Phil Schiller: So the combination of “What should come after the iPod?” and having this multitouch glass technology came together around the same time to give us this vision.
Scott Forstall: The whole illusion that we were trying to create was that your fingers were literally reaching through the screen to the content that you saw behind it.
Nitin Ganatra: If you looked at that UI, it was like comparing heaven and earth. That’s exactly how I felt and how everyone on our team felt too.
Scott Forstall: So we shelved the idea of the tablet for years and in 2004 we switched over to building what became the iPhone.
Ron Johnson: The phone is a product everyone uses—like music—right? Steve always wanted to do things that had a big market.
Nitin Ganatra: Purple was the code name for the software stack that would become the iPhone. And to get the kind of UI we wanted, it was understood that this project was going to be really ambitious, but there was also an understanding that it was going to be quite a long period of time before we could actually have it out there.
Scott Forstall: Steve knew that there were going to be a lot of people that were going to have to be involved, a lot of groups, so he put different people in charge of each of the groups. I was put in charge of all of the software, so I started and built a team.
Andy Grignon: And since Tony was making hardware, it landed in Fadell’s kind of purview.
Nitin Ganatra: The iPod team felt like it was their right to develop the next embedded hardware product that Apple has. They already had a phenomenal success with the iPod. They had delivered this thing in a very short amount of time, and it was already sort of seen as the future of Apple, even at that point. So of course the group that is going to develop the next thing that fits in your pocket is going to be the iPod group.
Tony Fadell: So first it was the iPod, then it was the iPod with music syncing, then it became the iPod with music and photo syncing, then it became the iPod with the iTunes Music Store so you did not have to rip anymore, then it worked with videos, then it became the iPod with games and videos and all the other stuff, so that was great, and then it was the iPod with games and downloadable apps or downloadable games, so now let’s make it a phone.
Nitin Ganatra: In early 2005 there was a meeting. Steve Jobs did most of the talking. Phil Schiller was there, and Tony Fadell, and then a lot of leadership from the Purple side, and Jon Rubinstein as well. So we all pile into this room, and Steve starts talking about how we have got this fantastic plan and we’ve got this great UI, but we don’t have time to wait.
Andy Hertzfeld: It was clear that iPods were going to disappear within five years because smartphones were going to subsume them.
Guy Bar-Nahum: It was a panic by Steve Jobs that Nokia and Motorola would kill iPod.
Phil Schiller: Because we realized that if anything were ever to challenge the idea that you have all your entertainment in your pocket—your movies, your photos, your music—it would be the cell phone.
Nitin Ganatra: At this point, almost on cue, Tony, who is sitting at the center of a sort of longish table, starts talking about a contingency plan for something that’s going to bridge between now and when we can actually ship Purple. That is when the designations P1 and P2 were created.
Tony Fadell: P1 was the iPod plus phone, the iPod-phone. It had a small screen and a wheel and a cell phone built into it.
Nitin Ganatra: P1 was ultimately a way to sort of unseat what Tony saw as being an unrealistic plan to begin with, which was to fit an OSX-based software stack onto iPhone hardware. P1 was Tony’s attempt to basically own the iPhone.
Andy Grignon: P2 was this purely experimental concept: Can we ship OSX on a phone? Is it possible? If we strip it back? P2 was the more radical design.
Nitin Ganatra: Tony thought the P2 team was never really capable of shipping the iPhone software to begin with, and once the P1 came out in record time it was going to be understood that P2 was a science project.
Andy Grignon: P2 was bloated, it was huge, it didn’t work. MacOS was built for heavy iron. P2 required an entirely new piece of silicon because of MacOS. This was Forstall’s attempt to insert himself into the phone project, right?
Nitin Ganatra: My whole goal at the time was to make it so that any functionality was demoed on P2 before it demoed in P1, because I want to start chipping away at this perception that this thing is a science project, and that it’s never going to ship. We definitely felt like we were the underdogs. One of the things that internally we used as a rallying point was “We need to demonstrate this functionality before the P1 team can,” and goddamn it if that didn’t work to motivate us.
Scott Forstall: They were there at night. They were there on weekends.
Nitin Ganatra: We lost Christmas vacation time, Thanksgiving time, holidays, weekends, nights, things like that. The first breakthrough was just actually seeing the full stack running on something that was not a Macintosh. The first version of the iPhone hardware was actually this thing where there were three different logic boards that were all separate and all connected up with cables, and on one end there was a little phone display, but it still took up, literally, two-thirds of a conference table. But the thing that was running on the display was the actual iPhone software, and it was actually able to send and receive text messages: real SMS messages going through the software stack through this prototype hardware and then back up to another phone. For me that was sort of the first big oh-my-God we’re-not-completely-off-in-the-weeds-here moment. We’re actually going to be able to make this thing work!
Matt Rogers: We were working on something else: a click-wheel-based solution. We were basically fusing a phone with an iPod. I was deep in the lab making this thing happen, and Tony was selling it to Steve. Every other week Tony would take what we were doing and show it to Steve. And Steve would say, “This is shit, this is shit, this is shit, this is good, fix that.”
Tony Fadell: It was about four or five months of research, but halfway through everybody knew it wasn’t working. But Steve didn’t want us to give up, so we kept working on it and getting more and more dejected.
Andy Grignon: We actually built a working iPod-phone, several hundred of them, actually. It was a little wider but still thinner than the iPods at the time. You would go into phone mode from player mode and the controls changed over to the rotary dial interface.
Ron Johnson: It was a familiar interface that was beloved. Everyone understood how to use the scroll wheel. And we could bring it out at, like, $400. To do the touch phone would be six or seven hundred dollars. So there was a long debate. There was a choice we had to make. We had to pick one, and I’m pretty sure everyone was leaning toward the iPod-phone. But Steve always leaned toward the future. Steve always leaned to the most innovative. I remember Steve saying, “If we don’t do this all-display phone, someone else might do it fir
st—and the all-display phone is the big idea.”
Guy Bar-Nahum: I’m not sure if it’s a real memory or not, but in my imagination, in my kind of mythical memory, there was a meeting where Steve said, “What is this thing that we’re building?” And Steve basically was looking at people and asking a rhetorical question, and he answered it: “We’re building software! This thing that we’re building is software. Software is pixels, and because it’s pixels, it has to be all screen.”
Matt Rogers: We spent a good three or four months on that initial prototype that Tony presented to Steve, and we ended up killing it because it wasn’t good enough. You can see why Steve made the call: “We can do better, guys.” The iPod-phone thing didn’t have apps. It was kind of music plus phone. OSX brings in all these other experiences.
Guy Bar-Naham: Before that, it was the land of confusion. It’s all kinds of creatures that were born in sin, and there were several of them that we all want to forget. There’s no value in going and digging and getting embarrassed by these weird things that we did before the decision to go all touch: weird amalgamations, incremental design away from iPod. Literally a phone with a wheel, right? Or a phone that was half touch surface, half screen. Those were exercises before the big insight, the big bombshell. The bombshell that Steve kind of laid on people was that “It has to be all screen.” So once you say that it’s all screen, it’s obvious. The shape is obvious.
Phil Schiller: It’s rounded corners, a rectangular shape, a full glass face with the black screen and the black area around the screen just seen as one.
Christopher Stringer: You want to create the simplest, purest manifestation of what the object can be.
Andy Grignon: So Tony, even though he delivered the hugely successful iPod business, had lost control. Tony was still on the hook to build the actual hardware, but Forstall had won the software war, and so now Tony was building Forstall’s hardware—which chapped him to no end.
Tony Fadell: The confidentiality started driving a wedge between the teams. And then it was used as a tool…