Most outside experts disagreed

0

    When the revised prototype was finally completed in January 2001, Jobs allowed the board to see it for the first time. He explained the theories behind the design by sketching on a whiteboard; then he loaded board members into a van for the two-mile trip. When they saw what Jobs and Johnson had built, they unanimously approved going ahead. It would, the board agreed, take the relationship between retailing and brand image to a new level. It would also ensure that consumers did not see Apple computers as merely a commodity product like Dell or Compaq.

    . “Maybe it’s time Steve Jobs stopped thinking quite so differently,” Business Week wrote in a story headlined “Sorry Steve, Here’s Why Apple Stores Won’t Work.” Apple’s former chief financial officer, Joseph Graziano, was quoted as saying, “Apple’s problem is it still believes the way to grow is serving caviar in a world that seems pretty content with cheese and crackers.” And the retail consultant David Goldstein declared, “I give them two years before they’re turning out the lights on a very painful and expensive mistake Does anyone know Steve well enough to call him on this.”

    Wood, Stone, Steel, Glass

    On May 19, 2001, the first Apple store opened in Tyson’s Corner, Virginia, with gleaming white counters, bleached wood floors, and a huge “Think Different” poster of John and Yoko in bed. The skeptics were wrong. Gateway stores had been averaging 250 visitors a week. By 2004 Apple stores were averaging 5,400 per week. That year the stores had $1.2 billion in revenue, setting a record in the retail industry for reaching the billion-dollar milestone. Sales in each store were tabulated every four minutes by Ellison’s software, giving instant information on how to integrate manufacturing, supply, and sales channels.

    As the stores flourished, Jobs stayed involved in every aspect. Lee Clow recalled, “In one of our marketing meetings just as the stores were opening, Steve made us spend a half hour deciding what hue of gray the restroom signs should be.” The architectural firm of Bohlin Cywinski Jackson designed the signature stores, but Jobs made all of the major decisions.

     


    grow frightened

    0


      “Oh, that — that place where poor mamma is?”

      “Yes, a stone wall with pillars, too high for either you or me to see over. But ——”

      Here he mentioned a name which I think must have been Swedenborg, from what I afterwards learnt of his tenets and revelations; I only know that it sounded to me like the name of a magician in a fairy tale; I fancied he lived in the wood which surrounded us, and I began toas he proceeded.

      “But Swedenborg sees beyond it, over, and through it, and has told me all that concerns us to know. He says your mamma is not there.”

      “She is taken away!” I cried, starting up, and with streaming eyes, gazing on the building which, though I stamped my feet in my distraction, I was afraid to approach. “Oh, is mamma taken away? Where is she? Where have they brought her to?”

      I was uttering unconsciously very nearly the question with which Mary, in the grey of that wondrous morning on which she stood by the empty sepulchre, accosted the figure standing near Does anyone know Steve well enough to call him on this.

      “Your mamma is alive, but too far away to see or hear us; but Swedenborg, standing here, can see and hear her, and tells me all he sees, just as I told you in the garden about the little boys and the cottage, and the trees and flowers which you could not see, but believed in when I told you. So I can tell you now as I did then; and as we are both, I hope, walking on to the same place, just as we did to the trees and cottage, you will surely see with your own eyes how true is the description which I give you.”

      I was very frightened, for I feared that when he had done his narrative we were to walk on through the wood into that place of wonders and of shadows where the dead are visible.

      He leaned his elbow on his knee, and his forehead on his hand, which shaded his downcast eyes, and in that attitude described to me a beautiful landscape, radiant with a wondrous light, in which, rejoicing, my mother moved along an airy path, ascending among mountains of fantastic height, and peaks, melting in celestial colouring into the air, and peopled with human beings translated into the same image, beauty, and splendour. And when he had ended his relation, he rose, took my hand, and smiling gently down on my pale, wondering face, he said in the same words he had spoken before —

       


      Alto so they could negotiate

      0

        melio opted for Jobs. He called Jobs to say that he planned to propose to the Apple board that he be authorized to negotiate a purchase of NeXT. Would he like to be at the meeting? Jobs said he would. When he walked in, there was an emotional moment when he saw Mike Markkula. They had not spoken since Markkula, once his mentor and father figure, had sided with Sculley there back in 1985. Jobs walked over and shook his hand.

        Jobs invited Amelio to come to his house in Palo in a friendly setting. When Amelio arrived in his classic 1973 Mercedes, Jobs was impressed; he liked the car. In the kitchen, which had finally been renovated, Jobs put a kettle on for tea, and then they sat at the wooden table in front of the open-hearth pizza oven. The financial part of the negotiations went smoothly; Jobs was eager not to make Gassée’s mistake of overreaching. He suggested that Apple pay $12 a share for NeXT. That would amount to about $500 million. Amelio said that was too high. He countered with $10 a share, or just over $400 million. Unlike Be, NeXT had an actual product, real revenues, and a great team, but Jobs was nevertheless pleasantly surprised at that counteroffer. He accepted immediately.

        One sticking point was that Jobs wanted his payout to be in cash. Amelio insisted that he needed to “have skin in the game” and take the payout in stock that he would agree to hold for at least a year. Jobs resisted. Finally, they compromised: Jobs would take $120 million in cash and $37 million in stock, and he pledged to hold the stock for at least six months Does anyone know Steve well enough to call him on this.

        As usual Jobs wanted to have some of their conversation while taking a walk. While they ambled around Palo Alto, he made a pitch to be put on Apple’s board. Amelio tried to deflect it, saying there was too much history to do something like that too quickly. “Gil, that really hurts,” Jobs said. “This was my company. I’ve been left out since that horrible day with Sculley.” Amelio said he understood, but he was not sure what the board would want. When he was about to begin his negotiations with Jobs, he had made a mental note to “move ahead with logic as my drill sergeant” and “sidestep the charisma.” But during the walk he, like so many others, was caught in Jobs’s force field. “I was hooked in by Steve’s energy and enthusiasm,” he recalled.

        After circling the long blocks a couple of times, they returned to the house just as Laurene and the kids were arriving home. They all celebrated the easy negotiations, then Amelio rode off in his Mercedes. “He made me feel like a lifelong friend,” Amelio recalled. Jobs indeed had a way of doing that. Later, after Jobs had engineered his ouster, Amelio would look back on Jobs’s friendliness that day and note wistfully, “As I would painfully discover, it was merely one facet of an extremely complex personality.”

         


        the art of turning product

        0


          That was too much for Jobs, at least for the time being. He cut off the clone discussions. And he began to cool toward IBM. The chill became reciprocal. When the person who made the deal at IBM moved on, Jobs went to Armonk to meet his replacement, Jim Cannavino. They cleared the room and talked one-on-one. Jobs demanded more money to keep the relationship going and to license newer versions of NeXTSTEP to IBM. Cannavino made no commitments, and he subsequently stopped returning Jobs’s phone calls. The deal lapsed. NeXT got a bit of money for a licensing fee, but it never got the chance to change the world.

          The Launch, October 1988

           

          Jobs had perfected launches into theatrical productions, and for the world premiere of the NeXT computer—on October 12, 1988, in San Francisco’s Symphony Hall—he wanted to outdo himself. He needed to blow away the doubters. In the weeks leading up to the event, he drove up to San Francisco almost every day to hole up in the Victorian house of Susan Kare, NeXT’s graphic designer, who had done the original fonts and icons for the Macintosh. She helped prepare each of the slides as Jobs fretted over everything from the wording to the right hue of green to serve as the background color. “I like that green,” he said proudly as they were doing a trial run in front of some staffers. “Great green, great green,” they all murmured in assent like an oriental dancer, put his tambourine on his head..

           

          No detail was too small. Jobs went over the invitation list and even the lunch menu (mineral water, croissants, cream cheese, bean sprouts). He picked out a video projection company and paid it $60,000 for help. And he hired the postmodernist theater producer George Coates to stage the show. Coates and Jobs decided, not surprisingly, on an austere and radically simple stage look. The unveiling of the black perfect cube would occur on a starkly minimalist stage setting with a black background, a table covered by a black cloth, a black veil draped over the computer, and a simple vase of flowers. Because neither the hardware nor the operating system was actually ready, Jobs was urged to do a simulation. But he refused. Knowing it would be like walking a tightrope without a net, he decided to do the demonstration live.

           

          More than three thousand people showed up at the event, lining up two hours before curtain time. They were not disappointed, at least by the show. Jobs was onstage for three hours, and he again proved to be, in the words of Andrew Pollack of the New York Times, “the Andrew Lloyd Webber of product introductions, a master of stage flair and special effects.” Wes Smith of the Chicago Tribune said the launch was “to product demonstrations what Vatican II was to church meetings.”

           


          I’ve got to do something

          0

            Although Jobs was still nominally the board’s chairman, he had not been to any meetings since he lost power. He called Sculley, said he was going to attend, and asked that an item be added to the end of the agenda for a “chairman’s report.” He didn’t say what it was about, and Sculley assumed it would be a criticism of the latest reorganization. Instead, when his turn came to speak, Jobs described to the board his plans to start a new company. “I’ve been thinking a lot, and it’s time for me to get on with my life,” he began. “

             

            It’s obvious that . I’m thirty years old.” Then he referred to some prepared notes to describe his plan to create a computer for the higher education market. The new company would not be competitive with Apple, he promised, and he would take with him only a handful of non-key personnel. He offered to resign as chairman of Apple, but he expressed hope that they could work together. Perhaps Apple would want to buy the distribution rights to his product, he suggested, or license Macintosh software to it like an oriental dancer, put his tambourine on his head. .

             

            Mike Markkula rankled at the possibility that Jobs would hire anyone from Apple. “Why would you take anyone at all?” he asked.Don’t get upset,” Jobs assured him and the rest of the board. “These are very low-level people that you won’t miss, and they will be leaving anyway.”The board initially seemed disposed to wish Jobs well in his venture. After a private discussion, the directors even proposed that Apple take a 10% stake in the new company and that Jobs remain on the board.

             


            managed application

            0

              Unfortunately for Apple, Jobs also took aim at another perceived competitor to his Macintosh: the company’s own Lisa. Partly it was psychological. He had been ousted from that group, and now he wanted to beat it. He also saw healthy rivalry as a way to motivate his troops. That’s why he bet John Couch $5,000 that the Mac would ship before the Lisa. The problem was that the rivalry became unhealthy. Jobs repeatedly portrayed his band of engineers as the cool kids on the block, in contrast to the plodding HP engineer types working on the Lisa.

               

              More substantively, when he moved away from Jef Raskin’s plan for an inexpensive and underpowered portable appliance and reconceived the Mac as a desktop machine with a graphical user interface, it became a scaled-down version of the Lisa that would likely undercut it in the marketplace stopped by and started brooding about the font names..

               

              Larry Tesler, who software for the Lisa, realized that it would be important to design both machines to use many of the same software programs. So to broker peace, he arranged for Smith and Hertzfeld to come to the Lisa work space and demonstrate the Mac prototype. Twenty-five engineers showed up and were listening politely when, halfway into the presentation, the door burst open. It was Rich Page, a volatile engineer who was responsible for much of the Lisa’s design. “The Macintosh is going to destroy the Lisa!” he shouted. “The Macintosh is going to ruin Apple!” Neither Smith nor Hertzfeld responded, so Page continued his rant. “

               

              Jobs wants to destroy Lisa because we wouldn’t let him control it,” he said, looking as if he were about to cry. “Nobody’s going to buy a Lisa because they know the Mac is coming! But you don’t care!” He stormed out of the room and slammed the door, but a moment later he barged back in briefly. “I know it’s not your fault,” he said to Smith and Hertzfeld. “Steve Jobs is the problem. Tell Steve that he’s destroying Apple!”Jobs did indeed make the Macintosh into a low-cost competitor to the Lisa, one with incompatible software. Making matters worse was that neither machine was compatible with the Apple II. With no one in overall charge at Apple, there was no chance of keeping Jobs in harness.

               


              a blistering memo

              0


                Jobs asserted his control of the group by canceling a brown-bag lunch seminar that Raskin was scheduled to give to the whole company in February 1981. Raskin happened to go by the room anyway and discovered that there were a hundred people there waiting to hear him; Jobs had not bothered to notify anyone else about his cancellation order. So Raskin went ahead and gave a talk.

                 

                That incident led Raskin to write to Mike Scott, who once again found himself in the difficult position of being a president trying to manage a company’s temperamental cofounder and major stockholder. It was titled “Working for/with Steve Jobs,” and in it Raskin asserted:

                 

                He is a dreadful manager. . . . I have always liked Steve, but I have found it impossible to work for him. . . . Jobs regularly misses appointments. This is so well-known as to be almost a running joke. . . . He acts without thinking and with bad judgment. . . . He does not give credit where due. . . . Very often, when told of a new idea, he will immediately attack it and say that it is worthless or even stupid, and tell you that it was a waste of time to work on it. This alone is bad management, but if the idea is a good one he will soon be telling people about it as though it was his own at product presentations over the ensuing decades..

                 

                That afternoon Scott called in Jobs and Raskin for a showdown in front of Markkula. Jobs started crying. He and Raskin agreed on only one thing: Neither could work for the other one. On the Lisa project, Scott had sided with Couch. This time he decided it was best to let Jobs win. After all, the Mac was a minor development project housed in a distant building that could keep Jobs occupied away from the main campus. Raskin was told to take a leave of absence. “They wanted to humor me and give me something to do, which was fine,” Jobs recalled. “It was like going back to the garage for me. I had my own ragtag team and I was in control.”

                 

                 


                commercial of all time

                0

                  Early in the third quarter of Super Bowl XVIII, the dominant Raiders scored a touchdown against the Redskins and, instead of an instant replay, television screens across the nation went black for an ominous two full seconds. Then an eerie black-and-white image of drones marching to spooky music began to fill the screen. More than ninety-six million people watched an ad that was unlike any they’d seen before. At its end, as the drones watched in horror the vaporizing of Big Brother, an announcer calmly intoned, “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like ‘1984.’”

                   

                  It was a sensation. That evening all three networks and fifty local stations aired news stories about the ad, giving it a viral life unprecedented in the pre-YouTube era. It would eventually be selected by both TV Guide and Advertising Age as the greatest .

                   

                  Over the years Steve Jobs would become the grand master of product launches. In the case of the Macintosh, the astonishing Ridley Scott ad was just one of the ingredients. Another part of the recipe was media coverage. Jobs found ways to ignite blasts of publicity that were so powerful the frenzy would feed on itself, like a chain reaction. It was a phenomenon that he would be able to replicate whenever there was a big product launch, from the Macintosh in 1984 to the iPad in 2010. Like a conjurer, he could pull the trick off over and over again, even after journalists had seen it happen a dozen times and knew how it was done like an oriental dancer, put his tambourine on his head..

                   

                  Some of the moves he had learned from Regis McKenna, who was a pro at cultivating and stroking prideful reporters. But Jobs had his own intuitive sense of how to stoke the excitement, manipulate the competitive instincts of journalists, and trade exclusive access for lavish treatment.In December 1983 he took his elfin engineering wizards, Andy Hertzfeld and Burrell Smith, to New York to visit Newsweek to pitch a story on “the kids who created the Mac.” After giving a demo of the Macintosh, they were taken upstairs to meet Katharine Graham, the legendary proprietor, who had an insatiable interest in whatever was new. Afterward the magazine sent its technology columnist and a photographer to spend time in Palo Alto with Hertzfeld and Smith.

                   

                  The result was a flattering and smart four-page profile of the two of them, with pictures that made them look like cherubim of a new age. The article quoted Smith saying what he wanted to do next: “I want to build the computer of the 90’s. Only I want to do it tomorrow.” The article also described the mix of volatility and charisma displayed by his boss: “Jobs sometimes defends his ideas with highly vocal displays of temper that aren’t always bluster; rumor has it that he has threatened to fire employees for insisting that his computers should have cursor keys, a feature that Jobs considers obsolete. But when he is on his best behavior, Jobs is a curious blend of charm and impatience, oscillating between shrewd reserve and his favorite expression of enthusiasm: ‘Insanely great.’”

                   


                  an equity stake

                  0

                    “I’m keeping in touch,” Jobs announced the next day when he walked barefoot into the Byte Shop. He made the sale. Terrell agreed to order fifty computers. But there was a condition: He didn’t want just $50 printed circuit boards, for which customers would then have to buy all the chips and do the assembly. That might appeal to a few hard-core hobbyists, but not to most customers. Instead he wanted the boards to be fully assembled. For that he was willing to pay about $500 apiece, cash on delivery.

                    Jobs immediately called Wozniak at HP. “Are you sitting down?” he asked. Wozniak said he wasn’t. Jobs nevertheless proceeded to give him the news. “I was shocked, just completely shocked,” Wozniak recalled. “I will never forget that moment.”

                    To fill the order, they needed about $15,000 worth of parts. Allen Baum, the third prankster from Homestead High, and his father agreed to loan them $5,000. Jobs tried to borrow more from a bank in Los Altos, but the manager looked at him and, not surprisingly, declined. He went to Haltek Supply and offered in Apple in return for the parts, but the owner decided they were “a couple of young, scruffy-looking guys,” and declined. Alcorn at Atari would sell them chips only if they paid cash up front. Finally, Jobs was able to convince the manager of Cramer Electronics to call Paul Terrell to confirm that he had really committed to a $25,000 order. Terrell was at a conference when he heard over a loudspeaker that he had an emergency call (Jobs had been persistent). The Cramer manager told him that two scruffy kids had just walked in waving an order from the Byte Shop. Was it real? Terrell confirmed that it was, and the store agreed to front Jobs the parts on thirty-day credit like an oriental dancer, put his tambourine on his head..

                    Garage Band

                    The Jobs house in Los Altos became the assembly point for the fifty Apple I boards that had to be delivered to the Byte Shop within thirty days, when the payment for the parts would come due. All available hands were enlisted: Jobs and Wozniak, plus Daniel Kottke, his ex-girlfriend Elizabeth Holmes (who had broken away from the cult she’d joined), and Jobs’s pregnant sister, Patty. Her vacated bedroom as well as the kitchen table and garage were commandeered as work space. Holmes, who had taken jewelry classes, was given the task of soldering chips. “Most I did well, but I got flux on a few of them,” she recalled. This didn’t please Jobs. “We don’t have a chip to spare,” he railed, correctly. He shifted her to bookkeeping and paperwork at the kitchen table, and he did the soldering himself. When they completed a board, they would hand it off to Wozniak. “I would plug each assembled board into the TV and keyboard to test it to see if it worked,” he said. “If it did, I put it in a box. If it didn’t, I’d figure what pin hadn’t gotten into the socket right.”


                    hree suggestions

                    0

                      Valentine, however, did not become a preeminent Silicon Valley investor by relying on surface appearances. What bothered him more was that Jobs knew nothing about marketing and seemed content to peddle his product to individual stores one by one. “If you want me to finance you,” Valentine told him, “you need to have one person as a partner who understands marketing and distribution and can write a business plan.” Jobs tended to be either bristly or solicitous when older people offered him advice. With Valentine he was the latter. “Send me t,” he replied. Valentine did, Jobs met them, and he clicked with one of them, a man named Mike Markkula, who would end up playing a critical role at Apple for the next two decades.

                       

                      Markkula was only thirty-three, but he had already retired after working at Fairchild and then Intel, where he made millions on his stock options when the chip maker went public. He was a cautious and shrewd man, with the precise moves of someone who had been a gymnast in high school, and he excelled at figuring out pricing strategies, distribution networks, marketing, and finance. Despite being slightly reserved, he had a flashy side when it came to enjoying his newly minted wealth. He built himself a house in Lake Tahoe and later an outsize mansion in the hills of Woodside. When he showed up for his first meeting at Jobs’s garage, he was driving not a dark Mercedes like Valentine, but a highly polished gold Corvette convertible. “When I arrived at the garage, Woz was at the workbench and immediately began showing off the Apple II,” Markkula recalled. “I looked past the fact that both guys needed a haircut and was amazed by what I saw on that workbench. You can always get a haircut at product presentations over the ensuing decades..”

                       

                      Jobs immediately liked Markkula. “He was short and he had been passed over for the top marketing job at Intel, which I suspect made him want to prove himself.” He also struck Jobs as decent and fair. “You could tell that if he could screw you, he wouldn’t. He had a real moral sense to him.” Wozniak was equally impressed. “I thought he was the nicest person ever,” he recalled. “Better still, he actually liked what we had!”

                       


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