The candidate looked baffled. “What did you say?”
“Are you a virgin?” Jobs asked. The candidate sat there flustered, so Jobs changed the subject. “How many times have you taken LSD?” Hertzfeld recalled, “The poor guy was turning varying shades of red, so I tried to change the subject and asked a straightforward technical question.” But when the candidate droned on in his response, Jobs broke in. “Gobble, gobble, gobble, gobble,” he said, cracking up Smith and Hertzfeld.
“I guess I’m not the right guy,” the poor man said as he got up to leave.
For all of his obnoxious behavior, Jobs also had the ability to instill in his team an esprit de corps. After tearing people down, he would find ways to lift them up and make them feel that being part of the Macintosh project was an amazing mission. Every six months he would take most of his team on a two-day retreat at a nearby resort.
The retreat in September 1982 was at the Pajaro Dunes near Monterey. Fifty or so members of the Mac division sat in the lodge facing a fireplace. Jobs sat on top of a table in front of them. He spoke quietly for a while, then walked to an easel and began posting his thoughts.
The first was “Don’t compromise.” It was an injunction that would, over time, be both helpful and harmful. Most technology teams made trade-offs. The Mac, on the other hand, would end up being as “insanely great” as Jobs and his acolytes could possibly make it—but it would not ship for another sixteen months, way behind schedule. After mentioning a scheduled completion date, he told them, “It would be better to miss than to turn out the wrong thing.” A different type of project manager, willing to make some trade-offs, might try to lock in dates after which no changes could be made. Not Jobs. He displayed another maxim: “It’s not done until it ships.”
Another chart contained a koōan-like phrase that he later told me was his favorite maxim: “The journey is the reward.” The Mac team, he liked to emphasize, was a special corps with an exalted mission. Someday they would all look back on their journey together and, forgetting or laughing off the painful moments, would regard it as a magical high point in their lives.
At the end of the presentation someone asked whether he thought they should do some market research to see what customers wanted. “No,” he replied, “because customers don’t know what they want until we’ve shown them.” Then he pulled out a device that was about the size of a desk diary. “Do you want to see something neat?” When he flipped it open, it turned out to be a mock-up of a computer that could fit on your lap, with a keyboard and screen hinged together like a notebook. “This is my dream of what we will be making in the mid-to late eighties,” he said. They were building a company that would invent the future.
For the next two days there were presentations by various team leaders and the influential computer industry analyst Ben Rosen, with a lot of time in the evenings for pool parties and dancing. At the end, Jobs stood in front of the assemblage and gave a soliloquy. “As every day passes, the work fifty people are doing here is going to send a giant ripple through the universe,” he said. “I know I might be a little hard to get along with, but this is the most fun thing I’ve done in my life.” Years later most of those in the audience would be able to laugh about the “little hard to get along with” episodes and agree with him that creating that giant ripple was the most fun they had in their lives.
The next retreat was at the end of January 1983, the same month the Lisa launched, and there was a shift in tone. Four months earlier Jobs had written on his flip chart: “Don’t compromise.” This time one of the maxims was “Real artists ship.” Nerves were frayed. Atkinson had been left out of the publicity interviews for the Lisa launch, and he marched into Jobs’s hotel room and threatened to quit. Jobs tried to minimize the slight, but Atkinson refused to be mollified. Jobs got annoyed. “I don’t have time to deal with this now,” he said. “I have sixty other people out there who are pouring their hearts into the Macintosh, and they’re waiting for me to start the meeting.” With that he brushed past Atkinson to go address the faithful.
Jobs proceeded to give a rousing speech in which he claimed that he had resolved the dispute with McIntosh audio labs to use the Macintosh name. (In fact the issue was still being negotiated, but the moment called for a bit of the old reality distortion field.) He pulled out a bottle of mineral water and symbolically christened the prototype onstage. Down the hall, Atkinson heard the loud cheer, and with a sigh joined the group. The ensuing party featured skinny-dipping in the pool, a bonfire on the beach, and loud music that lasted all night, which caused the hotel, La Playa in Carmel, to ask them never to come back.
Another of Jobs’s maxims at the retreat was “It’s better to be a pirate than to join the navy.” He wanted to instill a rebel spirit in his team, to have them behave like swashbucklers who were proud of their work but willing to commandeer from others. As Susan Kare put it, “He meant, ‘Let’s have a renegade feeling to our group. We can move fast. We can get things done.’” To celebrate Jobs’s birthday a few weeks later, the team paid for a billboard on the road to Apple headquarters. It read: “Happy 28th Steve. The Journey is the Reward.—The Pirates.”
One of the Mac team’s programmers, Steve Capps, decided this new spirit warranted hoisting a Jolly Roger. He cut a patch of black cloth and had Kare paint a skull and crossbones on it. The eye patch she put on the skull was an Apple logo. Late one Sunday night Capps climbed to the roof of their newly built Bandley 3 building and hoisted the flag on a scaffolding pole that the construction workers had left behind. It waved proudly for a few weeks, until members of the Lisa team, in a late-night foray, stole the flag and sent their Mac rivals a ransom note. Capps led a raid to recover it and was able to wrestle it from a secretary who was guarding it for the Lisa team. Some of the grown-ups overseeing Apple worried that Jobs’s buccaneer spirit was getting out of hand. “Flying that flag was really stupid,” said Arthur Rock. “It was telling the rest of the company they were no good.” But Jobs loved it, and he made sure it waved proudly all the way through to the completion of the Mac project. “We were the renegades, and we wanted people to know it,” he recalled.
Veterans of the Mac team had learned that they could stand up to Jobs. If they knew what they were talking about, he would tolerate the pushback, even admire it. By 1983 those most familiar with his reality distortion field had discovered something further: They could, if necessary, just quietly disregard what he decreed. If they turned out to be right, he would appreciate their renegade attitude and willingness to ignore authority. After all, that’s what he did.
By far the most important example of this involved the choice of a disk drive for the Macintosh. Apple had a corporate division that built mass-storage devices, and it had developed a disk-drive system, code-named Twiggy, that could read and write onto those thin, delicate 5¼-inch floppy disks that older readers (who also remember Twiggy the model) will recall. But by the time the Lisa was ready to ship in the spring of 1983, it was clear that the Twiggy was buggy. Because the Lisa also came with a hard-disk drive, this was not a complete disaster. But the Mac had no hard disk, so it faced a crisis. “The Mac team was beginning to panic,” said Hertzfeld. “We were using a single Twiggy drive, and we didn’t have a hard disk to fall back on.”
The team discussed the problem at the January 1983 retreat, and Debi Coleman gave Jobs data about the Twiggy failure rate. A few days later he drove to Apple’s factory in San Jose to see the Twiggy being made. More than half were rejected. Jobs erupted. With his face flushed, he began shouting and sputtering about firing everyone who worked there. Bob Belleville, the head of the Mac engineering team, gently guided him to the parking lot, where they could take a walk and talk about alternatives.
One possibility that Belleville had been exploring was to use a new 3½-inch disk drive that Sony had developed. The disk was cased in sturdier plastic and could fit into a shirt pocket. Another option was to have a clone of Sony’s 3½-inch disk drive manufactured by a
smaller Japanese supplier, the Alps Electronics Co., which had been supplying disk drives for the Apple II. Alps had already licensed the technology from Sony, and if they could build their own version in time it would be much cheaper.
Jobs and Belleville, along with Apple veteran Rod Holt (the guy Jobs enlisted to design the first power supply for the Apple II), flew to Japan to figure out what to do. They took the bullet train from Tokyo to visit the Alps facility. The engineers there didn’t even have a working prototype, just a crude model. Jobs thought it was great, but Belleville was appalled. There was no way, he thought, that Alps could have it ready for the Mac within a year.
As they proceeded to visit other Japanese companies, Jobs was on his worst behavior. He wore jeans and sneakers to meetings with Japanese managers in dark suits. When they formally handed him little gifts, as was the custom, he often left them behind, and he never reciprocated with gifts of his own. He would sneer when rows of engineers lined up to greet him, bow, and politely offer their products for inspection. Jobs hated both the devices and the obsequiousness. “What are you showing me this for?” he snapped at one stop. “This is a piece of crap! Anybody could build a better drive than this.” Although most of his hosts were appalled, some seemed amused. They had heard tales of his obnoxious style and brash behavior, and now they were getting to see it in full display.
The final stop was the Sony factory, located in a drab suburb of Tokyo. To Jobs, it looked messy and inelegant. A lot of the work was done by hand. He hated it. Back at the hotel, Belleville argued for going with the Sony disk drive. It was ready to use. Jobs disagreed. He decided that they would work with Alps to produce their own drive, and he ordered Belleville to cease all work with Sony.
Belleville decided it was best to partially ignore Jobs, and he asked a Sony executive to get its disk drive ready for use in the Macintosh. If and when it became clear that Alps could not deliver on time, Apple would switch to Sony. So Sony sent over the engineer who had developed the drive, Hidetoshi Komoto, a Purdue graduate who fortunately possessed a good sense of humor about his clandestine task.
Whenever Jobs would come from his corporate office to visit the Mac team’s engineers—which was almost every afternoon—they would hurriedly find somewhere for Komoto to hide. At one point Jobs ran into him at a newsstand in Cupertino and recognized him from the meeting in Japan, but he didn’t suspect anything. The closest call was when Jobs came bustling onto the Mac work space unexpectedly one day while Komoto was sitting in one of the cubicles. A Mac engineer grabbed him and pointed him to a janitorial closet. “Quick, hide in this closet. Please! Now!” Komoto looked confused, Hertzfeld recalled, but he jumped up and did as told. He had to stay in the closet for five minutes, until Jobs left. The Mac engineers apologized. “No problem,” he replied. “But American business practices, they are very strange. Very strange.”
Belleville’s prediction came true. In May 1983 the folks at Alps admitted it would take them at least eighteen more months to get their clone of the Sony drive into production. At a retreat in Pajaro Dunes, Markkula grilled Jobs on what he was going to do. Finally, Belleville interrupted and said that he might have an alternative to the Alps drive ready soon. Jobs looked baffled for just a moment, and then it became clear to him why he’d glimpsed Sony’s top disk designer in Cupertino. “You son of a bitch!” Jobs said. But it was not in anger. There was a big grin on his face. As soon as he realized what Belleville and the other engineers had done behind his back, said Hertzfeld, “Steve swallowed his pride and thanked them for disobeying him and doing the right thing.” It was, after all, what he would have done in their situation.
CHAPTER FOURTEEN
ENTER SCULLEY
The Pepsi Challenge
With John Sculley, 1984
The Courtship
Mike Markkula had never wanted to be Apple’s president. He liked designing his new houses, flying his private plane, and living high off his stock options; he did not relish adjudicating conflict or curating high-maintenance egos. He had stepped into the role reluctantly, after he felt compelled to ease out Mike Scott, and he promised his wife the gig would be temporary. By the end of 1982, after almost two years, she gave him an order: Find a replacement right away.
Jobs knew that he was not ready to run the company himself, even though there was a part of him that wanted to try. Despite his arrogance, he could be self-aware. Markkula agreed; he told Jobs that he was still a bit too rough-edged and immature to be Apple’s president. So they launched a search for someone from the outside.
The person they most wanted was Don Estridge, who had built IBM’s personal computer division from scratch and launched a PC that, even though Jobs and his team disparaged it, was now outselling Apple’s. Estridge had sheltered his division in Boca Raton, Florida, safely removed from the corporate mentality of Armonk, New York. Like Jobs, he was driven and inspiring, but unlike Jobs, he had the ability to allow others to think that his brilliant ideas were their own. Jobs flew to Boca Raton with the offer of a $1 million salary and a $1 million signing bonus, but Estridge turned him down. He was not the type who would jump ship to join the enemy. He also enjoyed being part of the establishment, a member of the Navy rather than a pirate. He was discomforted by Jobs’s tales of ripping off the phone company. When asked where he worked, he loved to be able to answer “IBM.”
So Jobs and Markkula enlisted Gerry Roche, a gregarious corporate headhunter, to find someone else. They decided not to focus on technology executives; what they needed was a consumer marketer who knew advertising and had the corporate polish that would play well on Wall Street. Roche set his sights on the hottest consumer marketing wizard of the moment, John Sculley, president of the Pepsi-Cola division of PepsiCo, whose Pepsi Challenge campaign had been an advertising and publicity triumph. When Jobs gave a talk to Stanford business students, he heard good things about Sculley, who had spoken to the class earlier. So he told Roche he would be happy to meet him.
Sculley’s background was very different from Jobs’s. His mother was an Upper East Side Manhattan matron who wore white gloves when she went out, and his father was a proper Wall Street lawyer. Sculley was sent off to St. Mark’s School, then got his undergraduate degree from Brown and a business degree from Wharton. He had risen through the ranks at PepsiCo as an innovative marketer and advertiser, with little passion for product development or information technology.
Sculley flew to Los Angeles to spend Christmas with his two teenage children from a previous marriage. He took them to visit a computer store, where he was struck by how poorly the products were marketed. When his kids asked why he was so interested, he said he was planning to go up to Cupertino to meet Steve Jobs. They were totally blown away. They had grown up among movie stars, but to them Jobs was a true celebrity. It made Sculley take more seriously the prospect of being hired as his boss.
When he arrived at Apple headquarters, Sculley was startled by the unassuming offices and casual atmosphere. “Most people were less formally dressed than PepsiCo’s maintenance staff,” he noted. Over lunch Jobs picked quietly at his salad, but when Sculley declared that most executives found computers more trouble than they were worth, Jobs clicked into evangelical mode. “We want to change the way people use computers,” he said.
On the flight home Sculley outlined his thoughts. The result was an eight-page memo on marketing computers to consumers and business executives. It was a bit sophomoric in parts, filled with underlined phrases, diagrams, and boxes, but it revealed his newfound enthusiasm for figuring out ways to sell something more interesting than soda. Among his recommendations: “Invest in in-store merchandizing that romances the consumer with Apple’s potential to enrich their life!” He was still reluctant to leave Pepsi, but Jobs intrigued him. “I was taken by this young, impetuous genius and thought it would be fun to get to know him a little better,” he recalled.
So Sculley agreed to meet again when Jobs next came to New York, which happened to b
e for the January 1983 Lisa introduction at the Carlyle Hotel. After the full day of press sessions, the Apple team was surprised to see an unscheduled visitor come into the suite. Jobs loosened his tie and introduced Sculley as the president of Pepsi and a potential big corporate customer. As John Couch demonstrated the Lisa, Jobs chimed in with bursts of commentary, sprinkled with his favorite words, “revolutionary” and “incredible,” claiming it would change the nature of human interaction with computers.
They then headed off to the Four Seasons restaurant, a shimmering haven of elegance and power. As Jobs ate a special vegan meal, Sculley described Pepsi’s marketing successes. The Pepsi Generation campaign, he said, sold not a product but a lifestyle and an optimistic outlook. “I think Apple’s got a chance to create an Apple Generation.” Jobs enthusiastically agreed. The Pepsi Challenge campaign, in contrast, focused on the product; it combined ads, events, and public relations to stir up buzz. The ability to turn the introduction of a new product into a moment of national excitement was, Jobs noted, what he and Regis McKenna wanted to do at Apple.
When they finished talking, it was close to midnight. “This has been one of the most exciting evenings in my whole life,” Jobs said as Sculley walked him back to the Carlyle. “I can’t tell you how much fun I’ve had.” When he finally got home to Greenwich, Connecticut, that night, Sculley had trouble sleeping. Engaging with Jobs was a lot more fun than negotiating with bottlers. “It stimulated me, roused my long-held desire to be an architect of ideas,” he later noted. The next morning Roche called Sculley. “I don’t know what you guys did last night, but let me tell you, Steve Jobs is ecstatic,” he said.
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