What particularly struck Nocera was Jobs’s “almost willful lack of tact.” It was more than just an inability to hide his opinions when others said something he thought dumb; it was a conscious readiness, even a perverse eagerness, to put people down, humiliate them, show he was smarter. When Dan’l Lewin handed out an organization chart, for example, Jobs rolled his eyes. “These charts are bullshit,” he interjected. Yet his moods still swung wildly, as at Apple. A finance person came into the meeting and Jobs lavished praise on him for a “really, really great job on this”; the previous day Jobs had told him, “This deal is crap.”
One of NeXT’s first ten employees was an interior designer for the company’s first headquarters, in Palo Alto. Even though Jobs had leased a building that was new and nicely designed, he had it completely gutted and rebuilt. Walls were replaced by glass, the carpets were replaced by light hardwood flooring. The process was repeated when NeXT moved to a bigger space in Redwood City in 1989. Even though the building was brand-new, Jobs insisted that the elevators be moved so that the entrance lobby would be more dramatic. As a centerpiece, Jobs commissioned I. M. Pei to design a grand staircase that seemed to float in the air. The contractor said it couldn’t be built. Jobs said it could, and it was. Years later Jobs would make such staircases a feature at Apple’s signature stores.
The Computer
During the early months of NeXT, Jobs and Dan’l Lewin went on the road, often accompanied by a few colleagues, to visit campuses and solicit opinions. At Harvard they met with Mitch Kapor, the chairman of Lotus software, over dinner at Harvest restaurant. When Kapor began slathering butter on his bread, Jobs asked him, “Have you ever heard of serum cholesterol?” Kapor responded, “I’ll make you a deal. You stay away from commenting on my dietary habits, and I will stay away from the subject of your personality.” It was meant humorously, but as Kapor later commented, “Human relationships were not his strong suit.” Lotus agreed to write a spreadsheet program for the NeXT operating system.
Jobs wanted to bundle useful content with the machine, so Michael Hawley, one of the engineers, developed a digital dictionary. He learned that a friend of his at Oxford University Press had been involved in the typesetting of a new edition of Shakespeare’s works. That meant that there was probably a computer tape he could get his hands on and, if so, incorporate it into the NeXT’s memory. “So I called up Steve, and he said that would be awesome, and we flew over to Oxford together.” On a beautiful spring day in 1986, they met in the publishing house’s grand building in the heart of Oxford, where Jobs made an offer of $2,000 plus 74 cents for every computer sold in order to have the rights to Oxford’s edition of Shakespeare. “It will be all gravy to you,” he argued. “You will be ahead of the parade. It’s never been done before.” They agreed in principle and then went out to play skittles over beer at a nearby pub where Lord Byron used to drink. By the time it launched, the NeXT would also include a dictionary, a thesaurus, and the Oxford Dictionary of Quotations, making it one of the pioneers of the concept of searchable electronic books.
Instead of using off-the-shelf chips for the NeXT, Jobs had his engineers design custom ones that integrated a variety of functions on one chip. That would have been hard enough, but Jobs made it almost impossible by continually revising the functions he wanted it to do. After a year it became clear that this would be a major source of delay.
He also insisted on building his own fully automated and futuristic factory, just as he had for the Macintosh; he had not been chastened by that experience. This time too he made the same mistakes, only more excessively. Machines and robots were painted and repainted as he compulsively revised his color scheme. The walls were museum white, as they had been at the Macintosh factory, and there were $20,000 black leather chairs and a custom-made staircase, just as in the corporate headquarters. He insisted that the machinery on the 165-foot assembly line be configured to move the circuit boards from right to left as they got built, so that the process would look better to visitors who watched from the viewing gallery. Empty circuit boards were fed in at one end and twenty minutes later, untouched by humans, came out the other end as completed boards. The process followed the Japanese principle known as kanban, in which each machine performs its task only when the next machine is ready to receive another part.
Jobs had not tempered his way of dealing with employees. “He applied charm or public humiliation in a way that in most cases proved to be pretty effective,” Tribble recalled. But sometimes it wasn’t. One engineer, David Paulsen, put in ninety-hour weeks for the first ten months at NeXT. He quit when “Steve walked in one Friday afternoon and told us how unimpressed he was with what we were doing.” When Business Week asked him why he treated employees so harshly, Jobs said it made the company better. “Part of my responsibility is to be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” But he still had his spirit and charisma. There were plenty of field trips, visits by akido masters, and off-site retreats. And he still exuded the pirate flag spunkiness. When Apple fired Chiat/Day, the ad firm that had done the “1984” ad and taken out the newspaper ad saying “Welcome IBM—seriously,” Jobs took out a full-page ad in the Wall Street Journal proclaiming, “Congratulations Chiat/Day—Seriously . . . Because I can guarantee you: there is life after Apple.”
Perhaps the greatest similarity to his days at Apple was that Jobs brought with him his reality distortion field. It was on display at the company’s first retreat at Pebble Beach in late 1985. There Jobs pronounced that the first NeXT computer would be shipped in just eighteen months. It was already clear that this date was impossible, but he blew off a suggestion from one engineer that they be realistic and plan on shipping in 1988. “If we do that, the world isn’t standing still, the technology window passes us by, and all the work we’ve done we have to throw down the toilet,” he argued.
Joanna Hoffman, the veteran of the Macintosh team who was among those willing to challenge Jobs, did so. “Reality distortion has motivational value, and I think that’s fine,” she said as Jobs stood at a whiteboard. “However, when it comes to setting a date in a way that affects the design of the product, then we get into real deep shit.” Jobs didn’t agree: “I think we have to drive a stake in the ground somewhere, and I think if we miss this window, then our credibility starts to erode.” What he did not say, even though it was suspected by all, was that if their targets slipped they might run out of money. Jobs had pledged $7 million of his own funds, but at their current burn rate that would run out in eighteen months if they didn’t start getting some revenue from shipped products.
Three months later, when they returned to Pebble Beach for their next retreat, Jobs began his list of maxims with “The honeymoon is over.” By the time of the third retreat, in Sonoma in September 1986, the timetable was gone, and it looked as though the company would hit a financial wall.
Perot to the Rescue
In late 1986 Jobs sent out a proposal to venture capital firms offering a 10% stake in NeXT for $3 million. That put a valuation on the entire company of $30 million, a number that Jobs had pulled out of thin air. Less than $7 million had gone into the company thus far, and there was little to show for it other than a neat logo and some snazzy offices. It had no revenue or products, nor any on the horizon. Not surprisingly, the venture capitalists all passed on the offer to invest.
There was, however, one cowboy who was dazzled. Ross Perot, the bantam Texan who had founded Electronic Data Systems, then sold it to General Motors for $2.4 billion, happened to watch a PBS documentary, The Entrepreneurs, which had a segment on Jobs and NeXT in November 1986. He instantly identified with Jobs and his gang, so much so that, as he watched them on television, he said, “I was finishing their sentences for them.” It was a line eerily similar to one Sculley had often used. Perot called Jobs the next day and offered, “If you ever need an investor, call me.”
Jobs did indeed need one, badly. But he was car
eful not to show it. He waited a week before calling back. Perot sent some of his analysts to size up NeXT, but Jobs took care to deal directly with Perot. One of his great regrets in life, Perot later said, was that he had not bought Microsoft, or a large stake in it, when a very young Bill Gates had come to visit him in Dallas in 1979. By the time Perot called Jobs, Microsoft had just gone public with a $1 billion valuation. Perot had missed out on the opportunity to make a lot of money and have a fun adventure. He was eager not to make that mistake again.
Jobs made an offer to Perot that was three times more costly than had quietly been offered to venture capitalists a few months earlier. For $20 million, Perot would get 16% of the equity in the company, after Jobs put in another $5 million. That meant the company would be valued at about $126 million. But money was not a major consideration for Perot. After a meeting with Jobs, he declared that he was in. “I pick the jockeys, and the jockeys pick the horses and ride them,” he told Jobs. “You guys are the ones I’m betting on, so you figure it out.”
Perot brought to NeXT something that was almost as valuable as his $20 million lifeline: He was a quotable, spirited cheerleader for the company, who could lend it an air of credibility among grown-ups. “In terms of a startup company, it’s one that carries the least risk of any I’ve seen in 25 years in the computer industry,” he told the New York Times. “We’ve had some sophisticated people see the hardware—it blew them away. Steve and his whole NeXT team are the darnedest bunch of perfectionists I’ve ever seen.”
Perot also traveled in rarefied social and business circles that complemented Jobs’s own. He took Jobs to a black-tie dinner dance in San Francisco that Gordon and Ann Getty gave for King Juan Carlos I of Spain. When the king asked Perot whom he should meet, Perot immediately produced Jobs. They were soon engaged in what Perot later described as “electric conversation,” with Jobs animatedly describing the next wave in computing. At the end the king scribbled a note and handed it to Jobs. “What happened?” Perot asked. Jobs answered, “I sold him a computer.”
These and other stories were incorporated into the mythologized story of Jobs that Perot told wherever he went. At a briefing at the National Press Club in Washington, he spun Jobs’s life story into a Texas-size yarn about a young man
so poor he couldn’t afford to go to college, working in his garage at night, playing with computer chips, which was his hobby, and his dad—who looks like a character out of a Norman Rockwell painting—comes in one day and said, “Steve, either make something you can sell or go get a job.” Sixty days later, in a wooden box that his dad made for him, the first Apple computer was created. And this high school graduate literally changed the world.
The one phrase that was true was the one about Paul Jobs’s looking like someone in a Rockwell painting. And perhaps the last phrase, the one about Jobs changing the world. Certainly Perot believed that. Like Sculley, he saw himself in Jobs. “Steve’s like me,” Perot told the Washington Post’s David Remnick. “We’re weird in the same way. We’re soul mates.”
Gates and NeXT
Bill Gates was not a soul mate. Jobs had convinced him to produce software applications for the Macintosh, which had turned out to be hugely profitable for Microsoft. But Gates was one person who was resistant to Jobs’s reality distortion field, and as a result he decided not to create software tailored for the NeXT platform. Gates went to California to get periodic demonstrations, but each time he came away unimpressed. “The Macintosh was truly unique, but I personally don’t understand what is so unique about Steve’s new computer,” he told Fortune.
Part of the problem was that the rival titans were congenitally unable to be deferential to each other. When Gates made his first visit to NeXT’s Palo Alto headquarters, in the summer of 1987, Jobs kept him waiting for a half hour in the lobby, even though Gates could see through the glass walls that Jobs was walking around having casual conversations. “I’d gone down to NeXT and I had the Odwalla, the most expensive carrot juice, and I’d never seen tech offices so lavish,” Gates recalled, shaking his head with just a hint of a smile. “And Steve comes a half hour late to the meeting.”
Jobs’s sales pitch, according to Gates, was simple. “We did the Mac together,” Jobs said. “How did that work for you? Very well. Now, we’re going to do this together and this is going to be great.”
But Gates was brutal to Jobs, just as Jobs could be to others. “This machine is crap,” he said. “The optical disk has too low latency, the fucking case is too expensive. This thing is ridiculous.” He decided then, and reaffirmed on each subsequent visit, that it made no sense for Microsoft to divert resources from other projects to develop applications for NeXT. Worse yet, he repeatedly said so publicly, which made others less likely to spend time developing for NeXT. “Develop for it? I’ll piss on it,” he told InfoWorld.
When they happened to meet in the hallway at a conference, Jobs started berating Gates for his refusal to do software for NeXT. “When you get a market, I will consider it,” Gates replied. Jobs got angry. “It was a screaming battle, right in front of everybody,” recalled Adele Goldberg, the Xerox PARC engineer. Jobs insisted that NeXT was the next wave of computing. Gates, as he often did, got more expressionless as Jobs got more heated. He finally just shook his head and walked away.
Beneath their personal rivalry—and occasional grudging respect—was their basic philosophical difference. Jobs believed in an end-to-end integration of hardware and software, which led him to build a machine that was not compatible with others. Gates believed in, and profited from, a world in which different companies made machines that were compatible with one another; their hardware ran a standard operating system (Microsoft’s Windows) and could all use the same software apps (such as Microsoft’s Word and Excel). “His product comes with an interesting feature called incompatibility,” Gates told the Washington Post. “It doesn’t run any of the existing software. It’s a super-nice computer. I don’t think if I went out to design an incompatible computer I would have done as well as he did.”
At a forum in Cambridge, Massachusetts, in 1989, Jobs and Gates appeared sequentially, laying out their competing worldviews. Jobs spoke about how new waves come along in the computer industry every few years. Macintosh had launched a revolutionary new approach with the graphical interface; now NeXT was doing it with object-oriented programming tied to a powerful new machine based on an optical disk. Every major software vendor realized they had to be part of this new wave, he said, “except Microsoft.” When Gates came up, he reiterated his belief that Jobs’s end-to-end control of the software and the hardware was destined for failure, just as Apple had failed in competing against the Microsoft Windows standard. “The hardware market and the software market are separate,” he said. When asked about the great design that could come from Jobs’s approach, Gates gestured to the NeXT prototype that was still sitting onstage and sneered, “If you want black, I’ll get you a can of paint.”
IBM
Jobs came up with a brilliant jujitsu maneuver against Gates, one that could have changed the balance of power in the computer industry forever. It required Jobs to do two things that were against his nature: licensing out his software to another hardware maker and getting into bed with IBM. He had a pragmatic streak, albeit a tiny one, so he was able to overcome his reluctance. But his heart was never fully in it, which is why the alliance would turn out to be short-lived.
It began at a party, a truly memorable one, for the seventieth birthday of the Washington Post publisher Katharine Graham in June 1987 in Washington. Six hundred guests attended, including President Ronald Reagan. Jobs flew in from California and IBM’s chairman John Akers from New York. It was the first time they had met. Jobs took the opportunity to bad-mouth Microsoft and attempt to wean IBM from using its Windows operating system. “I couldn’t resist telling him I thought IBM was taking a giant gamble betting its entire software strategy on Microsoft, because I didn’t think its software was very good,
” Jobs recalled.
To Jobs’s delight, Akers replied, “How would you like to help us?” Within a few weeks Jobs showed up at IBM’s Armonk, New York, headquarters with his software engineer Bud Tribble. They put on a demo of NeXT, which impressed the IBM engineers. Of particular significance was NeXTSTEP, the machine’s object-oriented operating system. “NeXTSTEP took care of a lot of trivial programming chores that slow down the software development process,” said Andrew Heller, the general manager of IBM’s workstation unit, who was so impressed by Jobs that he named his newborn son Steve.
The negotiations lasted into 1988, with Jobs becoming prickly over tiny details. He would stalk out of meetings over disagreements about colors or design, only to be calmed down by Tribble or Lewin. He didn’t seem to know which frightened him more, IBM or Microsoft. In April Perot decided to play host for a mediating session at his Dallas headquarters, and a deal was struck: IBM would license the current version of the NeXTSTEP software, and if the managers liked it, they would use it on some of their workstations. IBM sent to Palo Alto a 125-page contract. Jobs tossed it down without reading it. “You don’t get it,” he said as he walked out of the room. He demanded a simpler contract of only a few pages, which he got within a week.
Jobs wanted to keep the arrangement secret from Bill Gates until the big unveiling of the NeXT computer, scheduled for October. But IBM insisted on being forthcoming. Gates was furious. He realized this could wean IBM off its dependence on Microsoft operating systems. “NeXTSTEP isn’t compatible with anything,” he raged to IBM executives.
Walter Isaacson Great Innovators e-book boxed set: Steve Jobs, Benjamin Franklin, Einstein Page 27