Becoming Steve Jobs Page 10

  As it was supposed to do, the brilliant ad set up Steve’s “ta-da!” at the official presentation at De Anza. That day, Jobs was P. T. Barnum at his very best. He strolled the stage confidently. He positioned the Mac on the side of the rebellious, the creative, and the bold by reading lyrics from Bob Dylan’s “The Times They Are a-Changin’.” He took gleeful aim at IBM. He showed off the computer’s beautiful graphics, with its script “Insanely Great” unscrolling across the giant video screen above the stage. The amazing new machine even introduced itself to the crowd, its goofy cyborg voice intoning, “Hello. I’m Macintosh. It sure is great to get out of that bag,” referring to the padded canvas tote bag that had concealed it until Steve pulled it out and plugged it in. The crowd went wild, and Jobs, who seemed to choke up, soaked in the admiration. He delivered to the audience the idealized version of what the Mac was supposed to be, and the press ate it up. Primed by a long and brilliant pre-debut press campaign by McKenna, the magazines and trade journals went crazy. The Mac won raves across the board, from Computerworld to Fortune to Esquire to Money magazine, which called it “hands down, the best piece of hardware for its price.” Rolling Stone hailed its subculture bona fides. Venture magazine even went so far as to applaud Steve’s “maverick” management.

  The machine was housed in a cute, seemingly self-sufficient ivory-colored box the shape of a miniature refrigerator, a design so cozy it de-fanged the word computer all on its own. But the user interface was the real triumph of friendliness. For the first time, you could create files that looked like paper documents. You could use your mouse to control a cursor that would drag those documents into folders. If you wanted to delete what you had worked on, you put the document into a trash bin. These things had all been demonstrated at PARC but with none of the wondrous simplicity and playfulness on display at De Anza. The superlative reviews, curiosity, and deals with some of the nation’s leading universities fueled strong sales for a few months. But after the initial curiosity wore off, sales declined precipitously.

  Truth is, the Mac that Steve had delivered was deeply flawed. It was a brilliant piece of engineering and a gorgeous vision of where computing could go, but it was far too underpowered to be useful. Trying to hold the Mac to a $1,995 retail price, he had refused to include more than 128K of memory—about a tenth of what came with the higher-priced Lisa. The Mac’s bitmapping technology soaked up power. The lines and characters that appeared on its screen were pretty, but they sometimes took forever to show up. In fact, the original Mac did just about everything at a glacial pace. It came with a floppy disk drive rather than a hard drive, so copying files from one floppy disk to another was an arduous process in which the user had to pop the two floppies in and out of the computer multiple times. Adding to the machine’s woes: the Mac launched with hardly any software, because the operating system was still being tweaked right up to the day of launch. No wonder sales dried up. In his effort to realize a vision, Steve had slighted the machine’s utility.

  STEVE SHOULD HAVE been the guy leading the charge to overcome the Mac’s technological faults. There was plenty to be done—develop a hard drive for the machine, increase its memory, work with independent software developers to build more applications that took advantage of its great graphics. In fact, shortly after the Mac shipped, he was officially put in charge of the division overseeing both the Lisa and the Mac. But Steve wasn’t interested in supervising incremental improvements for either model. His career to date consisted of a couple of failures—his work on the Apple III and the Lisa—and a couple of breakthrough products. After creating an industry, and then capturing the world’s imagination with another revolutionary computer, he couldn’t be bothered with the heavy lifting required to make the Mac succeed as an ongoing business.

  Moreover, the glittery debut of the Mac sent Steve’s life spinning into a new stratosphere of celebrity, one that pumped up his sense of grand accomplishment. He delivered Macs to Mick Jagger, Sean Lennon, and Andy Warhol. For his thirtieth birthday, he hired Ella Fitzgerald to entertain a crowd of a thousand guests at the St. Francis Hotel in San Francisco. He affected a high-handedness that hurt him within his own industry as well. Steve had alienated the critical software developer community throughout the entire development of the Mac by making it seem that it would be a grand privilege if he allowed them to develop applications for his precious machine. “We’d go down to Cupertino,” remembers Bill Gates, “and Steve would be like, ‘This thing is so fucking cool; in fact, I don’t even know why I’m going to let you guys have anything to do with this. You know, I heard what a bunch of idiots you guys are, and, you know, this thing is so golden. It’s going to ship for $999, we’re about nine months away.’ ” Other times, Steve would betray his own insecurities. “And then the second day we’d have another meeting,” remembers Gates, “and Steve would be like, ‘Oh, shit, is this thing any good? Oh, God, can you help us out with this?’ ” Either way, he wasn’t easy to work with.

  The arrogance wasn’t tempered by the Mac’s swooning sales. Mike Slade, who then worked in marketing at Microsoft but later became an Apple employee and one of Steve’s close friends, remembers seeing that ego on full display in the fall of 1984, when Slade accompanied Gates to Apple’s national sales meeting at the Hilton Hawaiian Village in Honolulu. Getting its application software onto the Mac was critical for Microsoft, which had assigned a slew of developers to create graphical software for the new machine. And eventually Microsoft would become the leading Mac software vendor. But at the time the company had serious competition from Lotus, which had developed a spreadsheet for Mac called Jazz. “Jim Manzi and Eric Bedel [Lotus’s CEO and the Jazz product manager] were like the new girl in the frat,” remembers Slade, whose sharp sense of humor masks the kind of analytic chops that made him a favorite of both Gates and Jobs. “Steve and his whole gang were there, and they’re ignoring not only me but Bill [Gates]. They’re treating Bill like he’s the fucking janitor. They even gave us a bad table for dinner.” That night, Slade and Gates went for a long walk on the beach. “Bill was so caught up in the thing, so nervous. He had these Bass Weejuns on, and by the time we got back to the hotel they had salt water all over them. He had no idea he had been walking through water. He was oblivious to the whole thing.”

  Things were no better three months later when Slade and Gates prepared to demonstrate Excel to Steve, Sculley, and the other Apple brass. “We start showing them Excel, but we can’t show much, because the demo is barely working. After thirty seconds Steve totally loses interest. If the demo’s not working, he’s not interested. Sculley gets it, though, and we talk about how to position it as better than what’s on a PC. But Jobs is out of there, he’s moved to the other side of the table. And he and Bill and Andy Hertzfeld just get into this raging battle about BASIC [the popular programming language]. No one can control Jobs. I mean, I come from a pretty dysfunctional family and I’m thinking, This is the most unbelievable shit fight. But finally, finally, Steve leaves, and the meeting gets better.” Years later, after Steve’s death, Gates told me, “Steve’s a tough character, but he didn’t direct his anger at me all too often.” (Like many of the people we interviewed, Gates slipped into the present tense when talking about Steve, as if he were still alive.) When I asked him if there was anything Steve was terrible at, he laughed: “Sitting in meetings where he wasn’t the person presenting, and the subject was something mundane. Steve was hopeless at that.”

  MAC SALES FELL off a cliff in the second half of 1984. The Apple II still accounted for 70 percent of the company’s revenues. IBM’s PC was gaining market share. And the New Year provided no relief. Sales were so far off target that it began to look like the Macintosh might prove to be just as much of a failure as the Apple III and the Lisa. The board of directors, which had been led to believe that the Mac was both the replacement to the Apple II and an IBM-killer, was beginning to see that neither its CEO nor the head of its most important product division had a clear p
lan forward. As the pressure grew on Steve and Sculley, the two spent less time together, less time finishing each other’s sentences and singing each other’s praises. And that spelled trouble for Steve.

  In March 1985, Sculley decided that Steve would have to step down as head of the Mac product division. Steve tried to dissuade him for several weeks, with both flattery and scorn, the tools he’d used to great, if isolating, effect on those who had worked for him. But Sculley persisted and brought the matter to the board on April 11. The board sided unanimously with Sculley, even though it included Markkula, Rock, and others who had invested so much in Steve over time. For someone who had given his all to the company he had founded, who was known entirely for what he had accomplished at Apple, the prospect of such a demotion was devastating.

  After a few weeks, Steve decided that he wouldn’t accept the demotion. Instead, he tried to get Sculley fired. He told his closest confidants that he intended to dethrone the CEO over Memorial Day weekend, when Sculley was supposed to be in Beijing signing an accord to allow Apple to sell its computers in China. Steve was so certain of the rightness of his position—and so naïve—that he even laid out his plans to Jean-Louis Gassée, the company’s director of European operations, who was in Cupertino only because Sculley planned to bring him in to replace Steve. “I made my choice,” Gassée says now. “At that point I’d rather work with Sculley than work with Steve, who was absolutely out of control.” Gassée informed Sculley of the plan, telling him, “If you go to China, you’re dead.” Sculley canceled his trip to China and confronted Steve directly at the next day’s executive committee meeting. He asked the company’s top management either to support him or to support Steve. One by one, around the conference table, everyone explained why they would support Sculley. Steve watched as the support he’d counted on, which he’d always expected would be there at the end, vanished. Afterward, still in shock, he called his co-conspirators and a couple of friends to tell them he’d lost the battle. “I counted wrong,” he told Larry Brilliant that afternoon, recounting, through tears, how the team turned against him, one by one. The board, which Sculley then contacted by phone over the weekend, went against Steve as well. By Tuesday, Steve knew he was finished at Apple. On the following Friday, May 31, he sat in the back of the Apple auditorium and watched as Sculley announced a reorganization that promoted Gassée and left Steve with nothing more than a nonexecutive role as chairman, with no one reporting to him. It was Steve’s second demotion, and this time there’d be no recovery. “Steve always had an animal inside him,” says Gassée, “and in the early eighties that animal threw him to the ground. Boom!”

  STEVE’S EXILE WAS complete and designed to humiliate. He was given an office in another building, far from Sculley, Gassée, and the other executives who were now without question running Apple. He was sent to Russia to promote the Apple II, of all things, and to Italy, France, and Sweden, ostensibly on company business. Back in California, he visited the Graphics Group, made up of leading-edge computer graphics technicians who were working for film director George Lucas of Star Wars fame, and began to think that the possibilities for computing with high-end, 3-D graphic images were limitless. So he suggested that the Apple board might want to consider buying the group from Lucasfilm. “These guys were way ahead of us on graphics, way ahead,” Steve later told me. “They were way, way ahead of anybody. I just knew in my bones that this was going to be very important.” But the board wasn’t paying much attention to Steve anymore, and they passed on acquiring what would eventually become known as Pixar. Indeed, Steve, the cofounder of Apple, wasn’t even consulted on most meaningful decisions anymore.

  Sculley made clear that he would take the company in a more “market-driven” direction. Apple would now respond to the demands of its customers, instead of dictating to the market, as Steve had tried to do. Product decisions would be led by the sales and marketing teams, not the engineers. It was a rational decision by a CEO trying to sharpen an organization that had flailed every time it tried to establish some consistency. But it wouldn’t re-create the Apple dream that had drawn so many employees to Cupertino, especially the veterans who had experienced the thrilling and terrifying highs and lows of the Mac development. One employee told Fortune, “They’ve cut the heart out of Apple and substituted an artificial one. We’ll just have to see how long it pumps.” Susan Barnes was one of those who felt the company was becoming mundane, losing its edge. “We were going the wrong way,” remembers Barnes. “Apple was reorganizing, and you had to go down seven levels of management to find an engineer. That’s a really dangerous place for a technology company to be.”

  Steve started to think about life without Apple. He spent more time with his daughter Lisa, beginning the process of figuring out how she could fit into his life in a more meaningful way. He gardened, organically, in a plot in the yard of his big house in Woodside. He mused about running for public office. He even applied to fly as a civilian on the space shuttle. For a while he behaved more like a retiree than one of the world’s most highly driven thirty-year-olds. “One day he called me,” Barnes recalls, “and said, ‘We’re supposed to have dinner next week, but I’m going to Europe. I may stay there for twelve months.’ And I said, ‘Thank you, great, but I’m having a bad day at work and don’t really need to hear about you in Paris and Italy.’ ”

  He went to Europe on company business, but he made time to visit museums and enjoy the life of a tourist. He spent a lot of time alone, or with his girlfriend. “Apple had been formed when he was twenty-one,” says Barnes, “so he never really had any time off to think about what he really wanted to do with his life.” It seemed as if this was a time to reflect, to take to heart the hard lessons learned at Apple. It could have been a time to think about what had gone wrong, to understand his own contributions to the quandary that he and the company were in. In some meaningful way, Steve and his followers were right: Steve was the heart of Apple, and without him the company was headed straight for mediocrity. How had he let things get so out of hand?

  Self-reflection didn’t come easy for the thirty-year-old. In Europe he was still hailed as a revolutionary business figure, and his visits to heads of state, university presidents, artists, and others reinforced his vision of himself as an extraordinary person who had been done in by a conventional bureaucrat. That kind of ego inflation was accompanied by the real pain and insecurity resulting from getting rejected by the company he had founded. Later that summer, Steve phoned Barnes from Italy, so depressed that she started to worry that he might be suicidal.

  But when he returned to the United States, he turned his focus right back to where it had always been: discovering the Next Big Thing. In early September, he met with the Nobel Prize–winning scientist Paul Berg, who told him about his frustration that computers were not yet speeding up the scientific research process significantly. Macs and PCs weren’t powerful enough to do the kind of computational modeling he needed to do, and mainframes and minicomputers were too expensive and unwieldy for many labs. Steve began to develop an inchoate vision of where computing might go next, and of the kind of powerful computer he now wanted to concoct for demanding users like Berg. With Barnes and others telling him how wrongheaded Sculley was, he knew he could woo a handful of powerful allies from within Apple to start a new company. And at an Apple board meeting on September 13, he told Sculley and the other board members what he planned to do.

  He was going to start a new company, he told them. He would like to take a few “low-level” employees with him. The company would try to concoct a radically new, high-end computer “workstation” for a specific and limited market—the upper echelons of higher education. It would not, he assured them, compete with Apple. In fact, he’d be happy to have Apple be a ground-floor investor in the new venture.

  In the coming days, all hell would break loose. The employees he wanted were hardly “low-level,” Sculley would say. Board members would call Steve a liar in the press. Once ag
ain, national magazines like Newsweek would put him on the cover. Steve would resign. And Apple would sue him.

  But none of that mattered. He was gone. Now his great work could really begin. He was ready to go create the Next Big Thing. Again.

  Chapter 4

  What’s Next?

  In the balmy autumn days that followed his departure from Apple, Steve and his renegades gathered at his house in bucolic Woodside, a horsey community west of I-280 and nestled in a valley whose western slope swoops up to the coastal range of low mountains that protect Silicon Valley from the Pacific. The house, which he’d bought in 1984, was perhaps the most extravagant, albeit typically peculiar, nod to his rock-star status. It had been built by another controversial innovator, Daniel C. Jackling. In the early 1900s, Jackling had pioneered open-pit mining, the highly efficient yet disastrously polluting method for reaping low-grade copper that is still used throughout the world. Like Steve, Jackling made a bundle developing his idea, and the Woodside house, designed in Spanish Colonial style, was his personal monument. The rambling 17,000-square-foot structure had fourteen bedrooms, custom-made wrought-iron lamps, and a pipe organ that had been expanded to seventy-one ear-shattering pipes. Charles Lindbergh and Lillian Gish had been feted there at parties that flowed forth from the enormous ballroom. The driveway leading to the mansion showed off its ample landscaped grounds, which had fallen into some disrepair. Some of Steve’s indulgences—a BMW motorcycle and a gray Porsche 911—were parked out front. On the inside it didn’t feel much like a home at all. Steve hadn’t gotten around to buying much furniture. Strewn about the house were a mattress, a lamp, some Ansel Adams prints. He’d bought a monstrously big house, but had settled in without bothering to make it a home.