The Innovators

by Walter Isaacson

  I would appreciate letters from anyone who wants to pay up, or has a suggestion or comment. Just write to me at 1180 Alvarado SE, #114, Albuquerque, New Mexico, 87108. Nothing would please me more than being able to hire ten programmers and deluge the hobby market with good software.

  Bill Gates

  General Partner, Micro-Soft

  The letter was printed in the Homebrew Computer Club newsletter and also the Altair user group’s Computer Notes and the People’s Computer Company.77 It stirred up a frenzy. “I got a lot of shit,” Gates admitted. Of the three hundred letters he received, only five had a voluntary payment. Most of the rest heaped abuse on him.78

  Basically, Gates was correct. The creation of software was just as valuable as the creation of hardware. Those who made software deserved to be compensated. If they weren’t, people would quit writing software. By resisting the hacker ethos that anything that could be copied should be free, Gates helped ensure the growth of the new industry.

  Still, there was a certain audacity to the letter. Gates was, after all, a serial stealer of computer time, and he had manipulated passwords to hack into accounts from eighth grade through his sophomore year at Harvard. Indeed, when he claimed in his letter that he and Allen had used more than $40,000 worth of computer time to make BASIC, he omitted the fact that he had never actually paid for that time and that much of it was on Harvard’s military-supplied computer, funded by American taxpayers. The editor of one hobbyist newsletter wrote, “Rumors have been circulating through the hobby computer community that imply that development of the BASIC referred to in Bill Gates’s letter was done on a Harvard University computer provided at least in part with government funds and that there was some question as to the propriety if not the legality of selling the results.”79

  Also, though Gates did not appreciate it at the time, the widespread pirating of Microsoft BASIC helped his fledgling company in the long run. By spreading so fast, Microsoft BASIC became a standard, and other computer makers had to license it. When National Semiconductor came out with a new microprocessor, for example, it needed a BASIC and decided to license Microsoft’s because everyone was using it. “We made Microsoft the standard,” said Felsenstein, “and he called us thieves for doing so.”80

  At the end of 1978 Gates and Allen moved their company from Albuquerque back home to the Seattle area. Just before they left, one of the twelve staffers won a free photo shoot from a local studio, so they posed for what would become a historic photograph, with Allen and most of the others looking like refugees from a hippie commune and Gates sitting up front looking like a Cub Scout. On his drive up the California coast, Gates was slapped with three speeding tickets, two from the same policeman.81

  APPLE

  Among those in Gordon French’s garage at the first meeting of the Homebrew Computer Club was a socially awkward young hardware engineer named Steve Wozniak, who had dropped out of college and was working at Hewlett-Packard’s calculator division in the Silicon Valley town of Cupertino. A friend had shown him the flyer—“Are you building your own computer?”—and he worked up the courage to attend. “That night turned out to be one of the most important nights of my life,” he declared.82

  Wozniak’s father was a Lockheed engineer who loved explaining electronics. “One of my first memories is his taking me to his workplace on a weekend and showing me a few electronic parts, putting them on a table with me so I got to play with them,” Wozniak recalled. There were usually stray transistors and resistors lying around the house, and when Steve would ask, “What’s that?” his father would start from the beginning and explain how electrons and protons worked. “He pulled out a blackboard from time to time, and he would answer anything and make diagrams for it,” Wozniak said. “He taught me how to make an and gate and an or gate out of parts he got—parts called diodes and resistors. And he showed me how they needed a transistor in between to amplify the signal and connect the output of one gate to the input of the other. To this very moment, that is the way every single digital device on the planet works at its most basic level.” It was a striking example of the imprint a parent can make, especially back in the days when parents knew how radios worked and could show their kids how to test the vacuum tubes and replace the one that had burned out.

  Wozniak made a crystal radio using scraped pennies when he was in second grade, a multihouse intercom system for the kids in his neighborhood when he was in fifth grade, a Hallicrafters shortwave radio when he was in sixth grade (he and his dad earned ham licenses together), and later that year taught himself how to apply Boolean algebra to electronic circuit design and demonstrate it with a machine that never lost at tic-tac-toe.

  By the time he was in high school, Wozniak was applying his electronic wizardry to pranks. In one case he built a metronome attached to stripped batteries that looked like a bomb. When his principal discovered it ticking in a locker, he rushed it onto the playground away from the kids and called the bomb squad. Wozniak had to spend one night in the local house of detention, where he taught his fellow inmates to remove the wires on the ceiling fan and touch them to the iron bars in order to shock the jailer when he came to open the door. Although he had learned to code well, he was at heart a hardware engineer, unlike more refined software jockeys such as Gates. At one point he built a roulette-like game where players put their fingers in slots and when the ball landed one of them got shocked. “Hardware guys will play this game, but software guys are always way too chicken,” he said.

  Like others, he combined a love of technology with a hippie outlook, although he could not quite pull off the counterculture lifestyle. “I would wear this little Indian headband, and I wore my hair really long and grew a beard,” he recalled. “From the neck up, I looked like Jesus Christ. But from the neck down, I still wore the clothes of a regular kid, a kid engineer. Pants. Collared shirt. I never did have the weird hippie clothes.”

  For fun, he would study the manuals of the office computers made by Hewlett-Packard and DEC and then try to redesign them using fewer chips. “I have no idea why this became the pastime of my life,” he admitted. “I did it all alone in my room with my door shut. It was like a private hobby.” It was not an activity that made him the life of the party, so he became pretty much a loner, but that talent to save chips served him well when he decided to build a computer of his own. He did so using only twenty chips, compared to the hundreds in most real computers. A friend who lived down the block joined him for the soldering, and because they drank so much Cragmont cream soda, it was dubbed the Cream Soda Computer. There was no screen or keyboard; instructions were fed in by punch card, and answers were conveyed by flashing lights on the front.

  The friend introduced Wozniak to a kid who lived a few blocks away and shared their interest in electronics. Steve Jobs was almost five years younger and still at Homestead High, which Wozniak had attended. They sat on the sidewalk swapping tales about pranks they had pulled, Bob Dylan songs they liked, and electronic designs they had made. “Typically, it was really hard for me to explain to people the kind of design stuff I worked on, but Steve got it right away,” Wozniak said. “I liked him. He was kind of skinny and wiry and full of energy.” Jobs was similarly impressed. “Woz was the first person I’d met who knew more electronics than I did,” he later said, stretching his own expertise.

  Their greatest escapade, which laid the foundation for the computer partnership they would form, involved what was known as a Blue Box. In the fall of 1971, Wozniak read an article in Esquire describing how “phone phreaks” had created a device that emitted just the right tone chirps to fool the Bell System and cadge free long-distance calls. Before he even finished reading the article, he called Jobs, who was just beginning his senior year at Homestead High, and read parts of it aloud to him. It was a Sunday, but they knew how to sneak into a library at Stanford that might have the Bell System Technical Journal, which the Esquire article said included all the frequencies for the signal tones. After rummag
ing through the stacks, Wozniak finally found the journal. “I was practically shaking, with goose bumps and everything,” he recalled. “It was such a Eureka moment.” They drove to Sunnyvale Electronics to buy the parts they needed, soldered them together, and tested it with a frequency counter that Jobs had made as a school project. But it was an analog device, and they couldn’t get it to produce tones that were precise and consistent enough.

  Wozniak realized he would need to build a digital version, using a circuit with transistors. That fall was one of his infrequent semesters of dropping into college, and he was spending it at Berkeley. With help from a music student in his dorm, he had one built by Thanksgiving. “I have never designed a circuit I was prouder of,” he said. “I still think it was incredible.” They tested it by calling the Vatican, with Wozniak pretending to be Henry Kissinger needing to speak to the pope; it took a while, but the officials at the Vatican finally realized it was a prank before they woke up the pontiff.

  Wozniak had devised an ingenious gadget, but by partnering with Jobs he was able to do much more: create a commercial enterprise. “Hey, let’s sell these,” Jobs suggested one day. It was a pattern that would lead to one of the most storied partnerships of the digital age, up there with Allen & Gates and Noyce & Moore. Wozniak would come up with some clever feat of engineering, and Jobs would find a way to polish and package it and sell it at a premium. “I got together the rest of the components, like the casing and power supply and keypads, and figured out how we could price it,” Jobs said of the Blue Box. Using $40 worth of parts for each Blue Box, they produced a hundred that they sold for $150 apiece. The escapade ended after they got ripped off at gunpoint trying to sell one in a pizza parlor, but from the seeds of the adventure a company would be born. “If it hadn’t been for the Blue Boxes, there wouldn’t have been an Apple,” Jobs later reflected. “Woz and I learned how to work together.” Wozniak agreed: “It gave us a taste of what we could do with my engineering skills and his vision.”

  * * *

  Jobs spent the following year dropping in and out of Reed College and then seeking spiritual enlightenment on a pilgrimage to India. When he returned in the fall of 1974, he went to work at Atari under Nolan Bushnell and Al Alcorn. Atari, flush with its success with Pong, was on a hiring spree. “Have fun; make money,” declared one of the ads it took out in the San Jose Mercury. Jobs showed up dressed in his hippie garb and said he wouldn’t leave the lobby until he was hired. At Alcorn’s urging, Bushnell decided to take a chance on him. Thus the torch was passed from the most creative entrepreneur of video games to the man who would become the most creative entrepreneur of personal computers.

  Despite his newly acquired Zen sensibilities, Jobs was inclined to inform his coworkers that they were “dumb shits” whose ideas sucked. Yet somehow he also managed to be compelling and inspiring. He sometimes wore a saffron robe, went barefoot, and believed that his strict diet of only fruits and vegetables meant that he need not use deodorant or shower often. As Bushnell recounted, “this was a mistaken theory.” So he put Jobs on the night shift, when almost no one else was around. “Steve was prickly, but I kind of liked him. So I asked him to go on the night shift. It was a way to save him.”

  Jobs would later say that he learned some important lessons at Atari, the most profound being the need to keep interfaces friendly and intuitive. Instructions should be insanely simple: “Insert quarter, avoid Klingons.” Devices should not need manuals. “That simplicity rubbed off on him and made him a very focused product person,” said Ron Wayne, who worked with Jobs at Atari. In addition, Bushnell was able to help mold Jobs into an entrepreneur. “There is something indefinable in an entrepreneur, and I saw that in Steve,” Bushnell recalled. “He was interested not just in engineering, but also the business aspects. I taught him that if you act like you can do something, then it will work. I told him, pretend to be completely in control and people will assume that you are.”

  Wozniak liked to come by Atari most evenings, after he finished work at Hewlett-Packard, to hang with Jobs and play the auto racing video game, Gran Trak 10, that Atari had finally developed. “My favorite game ever,” he called it. In his spare time, he pieced together a home version of Pong that he could play on his TV set. He was able to program it to blast the word Hell or Damn whenever a player missed hitting the ball. One night he showed it to Alcorn, who came up with a scheme. He assigned Jobs to engineer a one-player version of Pong, to be called Breakout, in which a user could volley the ball against a brick wall, dislocating bricks to win points. Alcorn guessed, correctly, that Jobs would convince Wozniak to do the circuit design. Jobs was not a great engineer, but he was good at getting people to do things. “I looked at it as a two-for-one thing,” Bushnell explained. “Woz was a better engineer.” He was also a lovable and naïve teddy bear of a guy, who was as eager to help Jobs make a video game as Tom Sawyer’s friends were to whitewash his fence. “This was the most wonderful offer in my life, to actually design a game that people would use,” he recalled.

  As Woz stayed up all night churning out elements of the design, Jobs sat on a bench to his left wire-wrapping the chips. Woz thought the task would take weeks, but in an early example of Jobs exerting what colleagues called his reality distortion field, he was able to stare unblinkingly at Woz and convince him he could do the job in four days.

  Steve Jobs (1955–2011) and Steve Wozniak (1950– ) in 1976.

  Jobs graphic on the original Macintosh in 1984.

  Richard Stallman (1953– ).

  Linus Torvalds (1969– ).

  The March 1975 first gathering of the Homebrew Computer Club came just after Wozniak had finished designing Breakout. At the outset of the meeting, he felt out of place. He had been making calculators and home television game displays, but most of the excitement at that meeting centered on the new Altair computer, which didn’t initially interest him. Shy at the best of times, he withdrew into a corner. He later described the scene: “Someone there was holding up the magazine Popular Electronics, which had a picture of a computer on the front of it called the Altair. It turned out all these people were really Altair enthusiasts, not TV terminal people like I thought.” They went around the room introducing themselves, and when Wozniak’s turn came he said, “I’m Steve Wozniak, I work at Hewlett-Packard on calculators and I designed a video terminal.” He added that he also liked video games and pay movie systems for hotels, according to the minutes taken by Moore.

  But there was one thing that piqued Wozniak’s interest. A person at the meeting passed around the specification sheet for the new Intel microprocessor. “That night, I checked out the microprocessor data sheet and I saw it had an instruction for adding a location in memory to the A register,” he recalled. “I thought, Wait a minute. Then it had another instruction you could use for subtracting memory from the A register. Whoa. Well, maybe this doesn’t mean anything to you, but I knew exactly what these instructions meant, and it was the most exciting thing to discover ever.”

  Wozniak had been designing a terminal with a video monitor and a keyboard. He had planned for it to be a “dumb” terminal; it would have no computing power of its own, and instead it would connect via a phone line to a time-shared computer somewhere else. But when he saw the specs for the microprocessor—a chip that had a central processing unit on it—he had an insight: he could use a microprocessor to put some of the computing power into the terminal he was building. It would be a great leap from the Altair: a computer and a keyboard and a screen all integrated! “This whole vision of a personal computer just popped into my head,” he said. “That night, I started to sketch out on paper what would later become known as the Apple I.”

  After a day of work on calculator design at HP, Wozniak would go home for a quick dinner and then return to his cubicle to work on his computer. At 10 p.m. on Sunday, June 29, 1975, a historic milestone occurred: Wozniak tapped a few keys on his keyboard, the signal was processed by a microprocessor, and letters appe
ared on the screen. “I was shocked,” he confessed. “It was the first time in history anyone had typed a character on a keyboard and seen it show up on the screen right in front of them.” That was not precisely true, but it was indeed the first time a keyboard and a monitor had been integrated with a personal computer designed for hobbyists.

  The mission of the Homebrew Computer Club was to share ideas freely. That put it in the crosshairs of Bill Gates, but Wozniak embraced the communal ethos: “I so believed in the club’s mission to further computing that I Xeroxed maybe a hundred copies of my complete design and gave it to anyone who wanted it.” He was too shy, initially, to stand in front of the group and make a formal presentation, but he was so proud of his design that he loved standing in the back, showing it off to any who gathered around, and handing out the schematics. “I wanted to give it away for free to other people.”

  Jobs thought differently, just as he had with the Blue Box. And as it turned out, his desire to package and sell an easy-to-use computer—and his instinct for how to do it—changed the realm of personal computers just as much as Wozniak’s clever circuit design did. Indeed, Wozniak would have been relegated to minor mentions in the Homebrew newsletter had Jobs not insisted that they create a company to commercialize it.

  Jobs began calling chip makers such as Intel to get free samples. “I mean, he knew how to talk to a sales representative,” Wozniak marveled. “I could never have done that. I’m too shy.” Jobs also started accompanying Wozniak to Homebrew meetings, carrying the television set and conducting the demonstrations, and he came up with a plan to sell circuit boards preprinted with Wozniak’s design. It was typical of their partnership. “Every time I’d design something great, Steve would find a way to make money for us,” said Wozniak. “It never crossed my mind to sell computers. It was Steve who said, ‘Let’s hold them in the air and sell a few.’ ” Jobs sold his Volkswagen Bus and Wozniak sold his HP calculator to raise funding for their endeavor.